Weird but True IRS Policy

photo by Kimblahg

A man from Detroit got a letter from the IRS telling him that he owed five cents. It was the standard "pay now to avoid penalties and interest" letter. Then he got a second letter stating that he was due a refund of four cents. This letter said that he would need to send a request to the IRS to receive the refund since it was less than $1.

This isn't a joke or some crazy SAT problem. It's real--and yes, weird. The MSNBC article covering this story didn't say whether the man intended to send a request or if he applied his refund to what he owes. But it does make you wonder how much money the IRS is pocketing in change.

In December the IRS released the figures for unclaimed tax refunds and tax rebates of $110 MILLION. The $110 Million in unclaimed money is owed to 115,478 Americans, with the average unclaimed tax refund check totaling $953. But I'd be willing to bet that there are more than a few of those refunds that are less than $1. Hey, it costs more than $1 just to send a request including an envelope, postage, paper and your time.

You have three years from the date the return was filed to claim your refund. After that? It's your gift to the government.

One of the biggest reasons refunds go unclaimed is because the IRS has your address wrong. So be sure it's up to date. You might find out if you owed money by visiting the IRS site Where's My Refund.