O.C. Office No. 1 in Unclaimed IRS Refunds

Internal Revenue Service officials announced Monday that they are trying to find some 17,000 Southern California taxpayers to whom the federal government owes more than $11 million, by far the largest booty of homeless tax refunds in the country.

The sprawling Laguna Niguel district of the IRS, which covers the Long Beach and South Bay portions of Los Angeles County and all of Orange, San Diego, Riverside, Imperial and San Bernardino counties, “ranks No. 1 in the nation” in uncollected refunds, according to Wilson Fadely, national IRS spokesman in Washington.

Officials in Laguna Niguel are searching for more than 10,000 taxpayers, whom the government owes $6.2 million, spokeswoman Gindy Barnard said. Their refund checks were returned because the U.S. Postal Service was unable to obtain a current address for the recipients, officials said.

In the Los Angeles district, which covers most of Los Angeles County and parts of Ventura County, the IRS is searching for about 7,000 taxpayers who are owed about $5 million, spokeswoman Diane Cobb said.

“But no other district is even close to those two,” Fadely said.

In figures released throughout the nation Monday, the government claims to be seeking 92,000 taxpayers for an unclaimed $54 million, the highest amount of uncollected refunds in IRS history, Fadely noted.

IRS officials say the Los Angeles and Laguna Niguel districts combined are the largest in the federal system. Still, the number of uncollected refunds is unusual.

For the most part, IRS officials blamed the high mobility of Southland residents, but said some of that $11 million includes refunds claimed on tax returns with bogus Social Security numbers.

Barnard, the spokeswoman in the Laguna Niguel, said the government has had a problem in recent years with illegal immigrants filing returns with phony Social Security numbers in an attempt to legitimize residency. In other cases, the numbers simply may have been transposed. Either way, the IRS must track down the taxpayers and rectify the problem before refunds are issued, she said. And in these cases, the IRS can’t find them.

This has been more of a problem in Southern California than in other parts of the country, she said, although the government does not keep statistics on uncollected refunds resulting from false Social Security numbers.

“The vast majority of uncollected refunds are due primarily to people moving so frequently,” Barnard said. “That too tends to happen more often in Southern California than in other parts of the country.”

Vivian Doche-Boulos, chief demographer for the Southern California Assn. of Governments, agreed, and blamed the state’s economic woes for much of the transiency.

“We Californians move much more than the national average,” Doche-Boulos said, “especially in the last four or five years and mainly because of the economy. A lot of the movement is within Southern California, but in recent years, a lot of people have abandoned the region altogether, leaving nary a trace.

“Because of the recession, our outflow has been much greater than our intake. So these (IRS) figures don’t surprise me at all.”

IRS officials say the uncollected refunds range from $100 to $3,000 and average about $650. If they aren’t claimed within three years, they are turned over to the general fund of the government for “deficit busting,” Fadely said.

“When we finally do locate the people, they’re usually disgusted that we couldn’t find them,” Barnard said. “A lot of the time, though, they’re embarrassed that they failed to notify us or that that much money almost fell through the cracks.”

IRS officials said they are as vigilant about tracking down people with money coming as they are in tracking taxpayers who owe.

Those who think they might be due refunds may call (800) 829-1040.

“We want to give away money for a change,” Barnard said. “Contrary to our image, of course.”

Returned to Sender

More than 17,000 income tax refunds for Southern Californians have been returned to the Internal Revenue Service as “undeliverable.” The returns, which span a three-year period, total more than $11 million. Here’s what to do if you think some of the money may be yours:

* Pick up Form 3911 from one of two local IRS walk-in offices: Federal Building, 34 Civic Center Plaza, Second Floor, Santa Ana, or Chet Holifield Federal Building, 24000 Avila Road, Third Floor, Laguna Niguel.

* Carefully print all information required on Form 3911. Double-check your address and mail to the Internal Revenue Service address listed on the one-page form.

* For assistance in preparing the form, call (800) 829-1040.

* A refund or a rejection letter from the IRS will be mailed within four weeks.

Source: Internal Revenue Service