When you don’t pay your taxes, the IRS is on you like ants to a picnic. I know that because everyday I work with people whose tax problems are exacerbated by strong arm IRS tax collection techniques.

But what about people who overpay their taxes? It might seem hard to believe but the IRS had $1.3 billion sitting owed to 1.4 million people who did not file a tax return for tax year 2006. (You can read more about it at this IRS press release). This outstanding amount owed back to taxpayers happens because someone might pre-pay their tax based on quarterly estimates but then they fail to file a tax return at tax filing time.

The problem is, if you didn’t file your income tax within three years you generally forfeit your right to receive that refund. That means the money will not be leaving the U.S. Treasury, and Congress will be able spend it for its many “important” projects.

It doesn’t seem fair does it. The IRS gets a much longer time period to collect any money you owe them, but you get a much shorter time period to collect money from the the IRS that they owe you.

I guess Congress, who makes up these screwy rules thinks it’s fair, but that because it benefits them.
They fix the rules in their favor.

Related posts:

1. The Four Stresses You’ll Face During Tax Time
2. An Interesting Tax Problem Resulting From the Recession

Tags: Income Tax, income tax filing, IRS, irs filing date, Tax Collection, tax owing, tax payments, tax refund, taxes

This entry was posted on Tuesday, May 4th, 2010 at 9:06 am and is filed under Income Tax, IRS, Tax Collection. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.