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Wednesday, January 11, 2006

YOUR REFUND CHECK IS IN THE MAIL?

You have filed your federal income tax return, and you are checking your mailbox for your tax refund. You keep checking, but it doesn't show up. You call the IRS, and they won't give you any information. Is this a rare occurrence? Is something sinister going on?

According to Taxpayer Advocate Nina Olson in her report to Congress, thousands of refunds are frozen by the IRS each year without any knowledge given to the affected taxpayers. Further, IRS employees are prohibited from providing any information until six months after a taxpayer's inquiry.

Such frozen refunds are part of the IRS' Questionable Refund Program, under which computers flag questionable returns that are at high risk for fraudulent refund claims. More than three-quarters of the returns investigated are for low-income families who claim the earned income tax credit, a program that provides tax refunds for the working poor.

So if you are expecting a refund check, your check may not in fact be in the mail.

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