The Check Is in the Shredder, IRS Says : Taxes: Refunds worth nearly $5 million were destroyed after postal carriers in L.A. County returned them as undeliverable.
Still waiting for this year’s tax refund? Don’t believe it if someone tells you the check is in the mail.
It isn’t.
Internal Revenue Service officials have shredded 8,642 uncashed refund checks worth $4,918,792 that have been returned as “undeliverable” by Los Angeles County postal carriers.
Tax administrators say they have no intention of reissuing any of the checks unless taxpayers contact them and demand their money. For those taxpayers who don’t call, there is no guarantee that unclaimed refunds will ever be credited to future tax bills.
IRS officials say they are limited by federal laws and a staffing shortage from tracking down the rightful owners of the refunds--the largest of which is $229,015 owed to an unnamed Beverly Hills taxpayer.
Officials acknowledge that some of the money may never be returned, even though they have attempted to notify taxpayers by mail that they have refunds owed them. The letters were sent to the same address as the checks, however.
“Most of the people have probably moved since they filed their returns. But others may have had bad handwriting we couldn’t read,” said Jan Gribbon, a spokeswoman for the IRS office in Los Angeles. “Or maybe they died and their heirs haven’t contacted us.”
The IRS asks the Postal Service to forward the refund checks if recipients have moved. But letter carriers are often reluctant to do that for fear that the government checks will be lost or stolen, she said.
Once checks are returned to the IRS, they are destroyed because of those same concerns, according to Gribbon. Each fall, names and addresses of the “missing” taxpayers and the amount they are owed are put on a list used by IRS service representatives who handle taxpayer inquires.
But there’s no way to publicize the list among taxpayers whose names might be on it.
IRS administrators say they are prohibited by law from purchasing newspaper advertising space where the names could be published and made available to all taxpayers.
Officials are authorized to issue a shortened version of the list to the news media. It is of little value to reporters, however, since it contains no addresses, phone numbers or refund amounts.
Even when the shortened list is sent to reporters, things do not always go according to plan.
IRS officials mistakenly issued an old list to the press two weeks ago when they sought to announce this year’s list. Instead of naming taxpayers whose 1990 refund checks had been returned, it instead listed 1,400 taxpayers whose checks were returned during the years 1986 through 1990. Refunds totaling $747,406 remain unclaimed from that period.
Apologies, along with a corrected and updated list, were issued late Friday by IRS spokesman Robert Giannangeli.
The mix-ups surfaced when The Times contacted several taxpayers named on the initially released list to ask if they had ever received their refunds.
Pacific Palisades screenwriter Richard G. Huvard wasn’t expecting any money back. “I owed them money this year,” he explained. When Huvard telephoned the toll-free IRS number, a service representative denied knowledge of any list and claimed that the IRS computer showed he was entitled to no refund.
Chatsworth homemaker Sondra Colton was not anticipating a refund, either. When she called the IRS, she was also told that no refund list existed. Furthermore, the representative told her that her personal tax account would be checked only if Colton requested it in writing.
When the pair contacted the IRS’s Gribbon to ask for an explanation, Huvard was told he was owed $28 from his 1986 return and Colton was owed $150 from 1987.
“There’s some quirk in the system,” Gribbon said later. “It didn’t work the way it should have.”
Officials have since pledged to clear up confusion among IRS workers who handle refund inquiries from taxpayers who call the agency on a toll-free phone line, (800) TAX-1040.
But there is little that tax officials can do to prevent the kind of mix-ups that cause refund checks to be returned to them in the first place, other experts point out.
Taxpayers who scrawl their names and addresses on their tax returns instead of using the pre-printed labels provided by the IRS risk having an incorrect street number typed onto their refund checks by key punch operators.
And mail carriers are particularly cautious when it comes to handling the government checks--which are a popular target of mailbox thieves, said David Mazer, spokesman for the Postal Service in Los Angeles. Whether to try to decipher the correct address or try to forward checks to taxpayers who have moved is “a judgment call on the carrier’s part,” Mazer said.
Gyd Gydesen, a Los Angeles-area manager for the H & R Block tax preparation service, said taxpayers who know they will be moving soon after the April 15 tax filing deadline should cross out their old address and carefully print their new address on the IRS mailing label.
“If they don’t know what their new address will be, they can have their refund sent to a permanent address, like back to mom and dad,” Gydesen said.
Taxpayers, meantime, say they wish the government would work harder at reuniting them with errant refunds.
Actor Raymond D. Colbert, one of those on the initially released list, said he has been waiting several years for a $2,000 IRS refund check that apparently went astray when he moved from Studio City to Van Nuys.
Ironically, the overdue refund is from taxes he paid on income made from television work--including a TV commercial where he portrayed a frustrated customer standing in a long bank line to cash a check.
“I’m pretty easy to find. I’m in the phone book,” Colbert said with a shrug. “I’m sure they’d find me if I owed them money.”
