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IRS: Unclaimed 2016 refunds of $57M waiting for Illinois taxpayers

Taxpayers must file their 2016 tax returns with the IRS no later than this year’s extended tax due date of July 15
To collect refunds for tax year 2016, taxpayers must file their 2016 tax returns with the IRS no later than this year's extended tax due date of July 15, 2020.
To collect refunds for tax year 2016, taxpayers must file their 2016 tax returns with the IRS no later than this year's extended tax due date of July 15, 2020.(WDTV)
Published: Jul. 2, 2020 at 5:11 PM CDT
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WASHIGNTON (WIFR) -

Unclaimed income tax refunds worth more than $1.5 billion await an estimated 1.4 million individual taxpayers who did not file a 2016 federal income tax return, according to the Internal Revenue Service.

Illinois has an estimated 51,700 people with a median potential refund of $909 with total potential refunds of $57,312,200 throughout the state, according to the IRS.

The IRS extended the due date for filing tax year 2016 returns and claiming refunds for that year to July 15 of 2020, as a result of the COVID-19 pandemic. As the IRS is issuing Economic Impact Payments to Americans, the agency urges taxpayers who haven’t filed past due tax returns to file now to claim these refunds.

To collect refunds for tax year 2016, taxpayers must file their 2016 tax returns with the IRS no later than this year’s extended tax due date of July 15, 2020. The IRS estimates the midpoint for the potential refunds for 2016 to be $861 — that is, half of the refunds are more than $861 and half are less, according to the IRS.

In cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity to claim a tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury.

For 2016 tax returns, the window closes July 15 for most taxpayers. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the July 15 date.

There is no penalty for filing late when a refund is involved. Taxpayers seeking a 2016 tax refund should know that their checks may be held if they have not filed tax returns for 2017 and 2018. In addition, the refund will be applied to any amounts owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans, according to the IRS.

By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2016. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2016, the credit was worth as much as $6,269, according to the IRS.

Current and prior year tax forms (such as the tax year 2016 Form 1040, 1040A and 1040EZ) and instructions are available on the IRS.gov Forms and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676).

Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2016, 2017 or 2018 should request copies from their employer, bank or other payer. Taxpayers who are unable to get missing forms from their employer or other payer can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool.

Alternatively, they can mail Form 4506-T to request a wage and income transcript. A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return.

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