$67M IN TAX REFUNDS SITTING UNDELIVERED
By Dolores Kong
The Boston Globe
Last year, when newlyweds Keith and Lisa Florence
Wickersham filed their taxes together for the first
time, they carefully filled out the forms with their
new address and wrote a check for the amount due.
But little did they know that the Internal Revenue
Service had determined they were actually owed a
$2,500 refund, and that the check hadn't been
delivered for nearly a year - until a Globe reporter
called to alert them a little over a week ago.
"I'm very puzzled. I'm positive that if I didn't pay
my taxes this year, they'd find me," said Keith, 36,
Although the check is late, the couple is not
complaining. Keith just lost his job as product
manager at a company called WinWin.com, and the money
is especially welcome. "The timing is exceptional," he
said. "We could use it right now."
The Wickershams are among the nearly 100,000 or so
taxpayers nationwide who are owed refunds from past
years but who have not received their money because
the IRS can't find them. The total amount of
unreturned federal refunds is approximately $67
million, according to the IRS.
Some of the long-lost refunds stem from a mix-up of
Social Security numbers, names, and old or wrong
addresses, as apparently happened with the
Wickershams, even though they filled out their tax
forms correctly. The IRS apparently sent the
Wickershams' check to the address in Brookline where
Lisa lived before she was married.
Other cases suggest a lax tracking system, so that
even when a taxpayer files in subsequent years with
the correct address, name, and Social Security number,
the undelivered refund from years past may still not
get sent out.
Many of the examples seem to result from a
longstanding government policy of not forwarding
refund checks even when taxpayers have filled out a US
Postal Service change-of-address form. Only this
month, the IRS entered into a licensing agreement with
the Postal Service for a weekly electronic new-address
update, which is now being used to fix taxpayer files.
"Up to this point, government checks say not to send
it to a forwarding address, so it comes back to us,"
said Peggy Riley, spokeswoman for the IRS's Boston
office. But with the new Postal Service agreement, she
said, "this may alleviate some of those undelivered
A similar problem exists at the state level, with more
than 16,000 taxpayers owed more than $4 million, and
with the Massachusetts Department of Revenue saying it
can't find them.
While Massachusetts refund checks also do not get
forwarded by the Postal Service, state revenue
officials say they try to find taxpayers' new
addresses using a private contractor service.
It took a Globe reporter a few days to match more than
a half- dozen taxpayers with their long-lost refunds,
using nothing more than the little publicized lists of
taxpayers with unclaimed state and federal tax refunds
and an Internet phone directory. Among them:
- Joyce Zak of Brookline, who was owed a $400
Massachusetts tax refund dating back to the early
1980s, but which the state Department of Revenue never
delivered. "I had no money then. It would have really
helped," said Zak.
- Suffolk University graduate Sean Ziegenfuss, now a
network administrator in Chicago, has a $100
Massachusetts tax refund dating from the early 1990s
coming to him. "There's not a whole lot I can do with
$100, maybe a small part of a down payment on a
house," he said.
- Debra Yanofsky, 45, of Brookline, will be getting a
$500 state refund from tax year 1996, which apparently
couldn't be delivered after she married and moved,
even though she's filed taxes since then.
- A 25-year-old Newton accountant, who asked not to
have her name used, will be getting a $100 IRS refund
check that she had been expecting but that was somehow
not delivered last year, even though she hadn't moved.
"They just misspelled my address," she said. "I have
no idea how."
Currently, the IRS says that of the $67 million in
undelivered national refunds, $1 million belongs to
1,800 Massachusetts taxpayers.
The state has about $4.4 million in such unclaimed
refunds owed to 16,594 taxpayers, said DOR spokesman
Both IRS and DOR officials say they issue annual press
releases and rely upon newspapers to publish names of
taxpayers from their area. Connolly said the state has
been putting its list of names on its Web site since
1996, while Riley said the IRS plans to put the list
on the Internet.
"Unfortunately, being a governmental agency, we're not
really able to pay for any advertising" or otherwise
spend a lot of resources tracking down individuals,
Life gets busy, and some taxpayers may not realize a
refund check is missing or may not have the time to
chase it down. And in other cases, as with the
Wickershams, they thought that they owed taxes, not
that they had a refund due.
But perhaps even worse than not getting a refund when
due is that neither the IRS nor the DOR pays interest
on undelivered refunds, even if they date back years.
Today, Joyce Zak's $400 refund from the early 1980s
would be worth nearly $1,000, at a 5 percent interest
rate compounded annually. "Just because they couldn't
get their act together to get it to me, I should get
interest," said Zak, whose refund check apparently got
hung up because the state had an old address from
before she got married, and had transposed her and her
husband's Social Security numbers.
And at 5 percent, the approximately $67 million in
undelivered IRS refunds nationwide would earn $3.35
million in a year, and the approximately $4.4 million
in unclaimed state refunds would earn $220,000 in a
DOR's Connolly said under state law, "we are barred
from giving interest" on unclaimed refunds. The
interest that does accrue on that money as it sits in
state coffers winds up in general funds, he said.
The IRS pays interest on a refund only if the agency
takes more than 45 days to process it, and not if it
was processed in a timely way but the check got
returned as undeliverable, Riley said. The current
rate, determined quarterly, that the IRS pays on late-
processed refunds is 9 percent.
Then there is another $2.4 billion worth of estimated
IRS refunds that is about to be taken off the table
forever, never mind the interest.
These refunds are estimated to be due about 1.6
million people who didn't file for the 1997 tax year,
because they didn't think they owed taxes or had a
refund coming. About 36,000 of those people live in
Massachusetts and are estimated to be owed $71.5
million, according to the IRS.
If these non-filers don't submit their late claim for
a 1997 tax year refund by this April's deadline, they
lose their right to ever get that money. This year's
deadline is April 16 nationwide because the
traditional April 15 is a Sunday. In Massachusetts,
the deadline is April 17 because of Patriots Day.
Taxpayer advocates fear that many of those about to
lose access to this money are the working poor who
paid too much in taxes or didn't realize they
qualified for the refundable Earned Income Credit,
which was worth up to $3,656 in 1997 for eligible
workers with two or more children.
"Oftentimes, it's the people who don't understand the
tax forms who end up getting shortchanged," said Rick
Siegrist, co-president of Community Tax Aid of Boston,
a nonprofit that is in its 20th year of offering free
tax preparation for the low-income. "They don't
understand what they're entitled to."
Then there are the higher-income taxpayers who don't
file every year, who may also risk losing previous
"I just helped out a couple who hadn't filed in three
years. He was a professional who should have known
better," said Joseph Newpol, a tax attorney who is
also a professor in Bentley College's tax and personal
financial planning department. "One of the years,
there was a big refund. Of course, in two of the
years, he owed big money," said Newpol.
But even when people file their taxes faithfully, a
refund check can still be long lost.
Even though the Wickershams were careful to put down
their new Boxford address when they filed jointly for
the first time last year, the IRS apparently sent the
check to Lisa's old Brookline address from two years
ago, before they married.
"We don't know the reason for why they couldn't send
it to the correct address," said Keith, as he pulled
out his copy of last year's federal tax return to
verify how it was filled out. "We definitely filed
under this address."
No matter, they're happy now that the refund's found.
"We really appreciate it," Keith said. "It's a
substantial amount of money."