Time Running Out to Claim ’96 Tax Refund

Calling all taxpayers.

If you didn’t file a tax return in the recent past, perhaps because you earned so little that you were not required to file, you might want to reconsider--in a hurry.

The Internal Revenue Service estimates that U.S. taxpayers will lose $2 billion this year because they failed to claim federal tax refunds they were due from the 1996 tax year.

While the IRS can go after you indefinitely if you failed to file a return and you owed taxes for a particular year, if you are owed a refund, you have just three years after that year’s tax filing deadline to stake your claim. For people who failed to file 1996 returns, that means your return must be received by the IRS by Saturday. Note that the 1999 tax filing deadline is Monday because the normal April 15 deadline falls on a weekend--but you don’t get those extra days for filing late returns.

Why would somebody who was owed a refund not file? Often people in this category were students who had part-time jobs but mistakenly believed they shouldn’t file because they were a dependent on their parents’ returns, a spokeswoman for the agency speculates.

Meanwhile, immigrants and people new to the U.S. work force might have failed to file simply because they didn’t understand the tax system. In addition, some seniors and others might not have filed because their income is below the mandatory filing thresholds and they had a limited amount of wages or other income subject to federal tax withholding.

Of course, you don’t have to file if you earned less than set amounts. But, if tax money was withheld from your pay, retirement or investment income, filing is in your best interest. That’s because such low-income individuals are usually due tax refunds. The IRS estimates that roughly 1.56 million non-filers from 1996 are due refunds, averaging $1,324 each. (Several million other non-filers are not entitled to refunds.)

California and Texas were the last known addresses for a huge number of these non-filers--174,800 and 119,100 individuals, respectively--who are owed an estimated $550 million.

“If you are expecting a refund, it is certainly worth the effort to file and claim it,” said Brenda Schafer, senior tax research coordinator at H&R; Block in Kansas City, Mo. “But even if you aren’t, it’s important to file anyway.”

That’s because your balance due will never disappear.

“The statute of limitations runs on refunds--but it doesn’t when you owe money,” Schafer said. “The balance you owe just keeps accruing interest and penalties.”

How do you file a return if you didn’t save your W-2 wage report or the appropriate tax forms for that year? The simplest answer is go to your nearest IRS walk-in office and ask someone to print a new W-2 for you while you wait.

Local IRS offices, located in most major cities, have wage and withholding data on file for every taxpayer whose wages were reported with a W-2, 1099 or other form that’s sent in duplicate to the federal government, said Keith Kimball, an IRS spokesman in Los Angeles.

The walk-in offices also have the publications and forms that help figure your standard deductions, personal exemption amounts and tax owed for the 1996 tax year. Better yet, if you complete the form in the IRS office, you can turn it in at the counter and get it stamped as received on the spot. That ensures that you make the deadline.

IRS walk-in offices are listed in the phone book. There are three in the greater Los Angeles area, in L.A., Van Nuys and El Monte.

Be prepared for a long day. Service centers are always busy at this time of year. If other 1996 non-filers rush into IRS offices this week, you could be waiting for hours.

Normally, you can request W-2 data from the IRS over the phone. However, the agency has an estimated processing time of seven to 10 days for forms sent through the mail. Obviously, that’s too long to wait since your ability to claim a 1996 refund expires this week.

If you can’t get into an IRS center this week, you can contact your former employer or employers and ask them to fax you a copy of your W-2. You can get copies of tax forms at your public library.

Remember, time is of the essence. If you mail the forms, send them certified with a return receipt requested, Schafer suggests. If you use an overnight delivery service, be sure to keep the tracking code so you can find out when the envelope reached the IRS.

Schafer has a final bit of advice for tax-return slackers: “Get your 1997 return in now too, so you won’t be rushing to do this again in April of next year.”