IRS Has Nearly $1 Billion in Unclaimed Refunds That Expire April 15

IR-2013-29, IRS Has $917 Million for People Who Have Not Filed a 2009 Income Tax Return:

Refunds totaling just over $917 million may be waiting for an estimated 984,400 taxpayers who did not file a federal income tax return for 2009, the IRS announced today. However, to collect the money, a return for 2009 must be filed with the IRS no later than Monday, April 15, 2013.

The IRS estimates that half the potential refunds for 2009 are more than $500.

Some people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury.

For 2009 returns, the window closes on April 15, 2013. The law requires that the return be properly addressed, mailed and postmarked by that date. There is no penalty for filing a late return qualifying for a refund.

IRS Extends Deadline for Hurricane Sandy Tax Break

The Internal Revenue Service has postponed until Oct. 15, 2013, the deadline to make an election to deduct losses for the preceding taxable year from Hurricane Sandy.

Notice 2013-21 postpones until Oct. 15, 2013, the deadline to make an election under Section 165(i) of the Tax Code to deduct in the preceding taxable year losses attributable to Hurricane Sandy that were sustained in federally declared disaster areas in Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and West Virginia.

Last October, Hurricane Sandy struck the East Coast, causing severe damage in a number of states, the IRS noted. President Obama issued major disaster and emergency declarations under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, for certain areas. The Federal Emergency Management Agency determined certain areas within those states and the District of Columbia to be eligible for Public Assistance or Public Assistance and Individual Assistance under the Stafford Act.

Section 165(i) provides that if a taxpayer sustains a loss attributable to a federally declared disaster occurring in a disaster area, the taxpayer may elect to deduct that loss on their tax return for the taxable year immediately preceding the taxable year in which the disaster occurred.

Section 1.165-11(e) of the Income Tax Regulations requires a taxpayer to make the election by filing a return, an amended return or a refund claim on or before the later of: (1) the due date of the taxpayer’s income tax return (determined without regard to any extension of time for filing the return) for the taxable year in which the disaster actually occurred; or (2) the due date of the taxpayer’s income tax return (determined with regard to any extension of time for filing the return) for the immediately preceding taxable year.

Section 1.165-11(e) provides that the return or claim should specify the date or dates of the disaster that gave rise to the loss, and the city, town, county and state in which the property that was damaged or destroyed was located at the time of the disaster. The election is irrevocable 90 days after the taxpayer makes it.

Section 7508A gives the Treasury Secretary the authority to postpone the time for performing certain acts under the tax laws for up to one year for a taxpayer affected by a federally declared disaster. Under that authority, the IRS is granting affected taxpayers a postponement until Oct. 15, 2013, to make an election under Section 165(i) for losses attributable to Hurricane Sandy.

To help the IRS identify affected taxpayers to ensure that they receive this postponement of the deadline to make the Section 165(i) election, they should include a reference to this notice, Notice 2013-21, with their return, amended return or refund claim on which they are making a postponed Section 165(i) election.

The return or claim should also include the other information requested in Section 1.165-11(e).

IRS Now Accepting All 2012 Returns

WASHINGTON — The Internal Revenue Service announced today that it has finished updating its tax-processing systems allowing all remaining individual and business taxpayers to file their 2012 federal income tax returns.

Over the weekend, the IRS completed reprogramming and testing of its systems for tax-year 2012 including all remaining updates required by the American Taxpayer Relief Act (ATRA) enacted by Congress in January. This final step clears the way for those claiming residential energy credits on Form 5695 and various business tax credits and deductions to file their returns.

The IRS began accepting 2012 returns in phases as it worked quickly to update various forms and instructions and made critical adjustments to its processing systems to reflect the current law. As a result, the agency began accepting most returns filed by individual taxpayers on Jan. 30. Additional returns could be accepted in February. All remaining returns, affecting in relative terms the smallest group of taxpayers, can now be filed. 

With just six weeks to go before this year’s April 15 deadline, the IRS reminds taxpayers that the best way to file an accurate return is to e-file, choose direct deposit if expecting a refund and take advantage of the wide variety of tax-filing and tax-help resources available on IRS.gov.

IRS to Enable Remaining Tax Forms by Early March

The Internal Revenue Service plans to allow more of the remaining tax forms that have not been available for electronic filing yet this tax season to go through during the first week of March. In an email to software developers and transmitters on Wednesday, the IRS noted that due to late legislation, the IRS delayed startup for the tax forms listed below until the first week in March. To ensure there are no issues with accepting the forms for downstream processing, the IRS is asking software developers and transmitters to adhere to the following plan: The schemas and business rules will be deployed in the Production environment during the March 3, 2013 Sunday maintenance window. When the Production environment becomes operational at 7:00 am Eastern Time, transmitters should only send their stockpiled inventory of tax returns they have held back, evenly spread throughout the day on Sunday, This will allow the IRS’s Modernized e-File system team to quickly review the reject trends for the returns to ensure the schemas and business rules work as intended. “Please do not enable online filing for the forms until the IRS officially announces the processing of these forms targeted for the first week of March,” the IRS asked. Barring any problems, the IRS will then send out a QuickAlert email early in the week announcing the official opening. At that time, it will ask companies to enable online filing for these forms.