FINANCE TIPS FOR SINGLE MOMS

$73 million in refunds returned to IRS - by BankRate.com

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Uncle Sam might have some money for you, just in time for holiday spending.

The Internal Revenue Service has over $73 million in undeliverable refund checks. The reason? The agency has the wrong address for the taxpayers due the money. The most common reason for the returned checks is taxpayers who moved after filing their last tax return and then forgot to alert the IRS. If this is your case, file Form 8822, Change of Address, now. Once the agency gets your corrected mailing information, it will issue you a replacement refund check.

Returned refund checks are nothing new, but taxpayers seem to be getting better about making sure they get their money. The IRS says this batch of 87,485 undeliverable checks is 5,000 fewer than were returned last year. But the average refund check awaiting its owner this year is bigger: $836 compared with last year’s average of $722.

Some of these unclaimed checks will automatically find their way to the rightful owners during next year's tax-filing season when they send in returns with correct addresses. The IRS keeps the returned check information on file and will forward the money as soon as it gets valid delivery data. However, if you file Form 8822 now, you don't have to wait that long.

The IRS also has added a refund locator to its Web site for filers who think they're missing their refunds. To use it, you must enter your Social Security number, filing status and the amount of the refund shown on your tax return. If the money has come back to the IRS, the filer will get instructions on how to resolve the problem and get the right refund.

For security purposes, your browser must have the latest encryption technology. If it doesn't, you'll get an error message. If you cannot or do not want to upgrade your Web browser, you can call the IRS toll-free at 1-800-829-1040 to find out your refund status information. You'll need the same information required by the Web locator.

Let the IRS know ASAP
But rather than trying to track down your check or waiting until you file your next return to get your money, don't become an owed taxpayer in the first place. Make sure your return's address is correct -- whether you write it in, type it on your computer or use a preprinted label.

When you do move, let the agency know your new address by filing Form 8822. Although the IRS is working more closely with the U.S. Postal Service to utilize the mailman's new-address data, using the IRS form to directly inform the agency of your address change is always a good move.

Other checks routinely come back because the recipient changes a last name, usually because of a marriage or divorce. Again, let the tax collector (via Form 8822), as well as the Social Security Administration, know this. Not only does such notification head off delays in processing tax returns and issuing refunds, it safeguards future Social Security benefits.

And executors should explore whether a refund check might be involved in an estate's settlement.

Collect directly
The IRS also suggests that instead of waiting for your refund via the mail, have it directly deposited.

The payments get to filers quicker and, the IRS says, the method is more secure and convenient. There is no check to get lost -- or returned as undeliverable -- and no special trip to the bank to deposit a check.

To request direct deposit, simply follow the instructions on the "refund" line of your tax return. You can have a refund directly deposited regardless of which return (1040EZ, 1040A or 1040) you file.

You'll need to tell the IRS which type of account you have, the account number and the nine-digit routing number. Check with your account holder if you're unsure of the correct numbers to put here.

One other thing to keep in mind: Some financial institutions do not allow a joint refund to be deposited into an individually owned account.
 

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