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Personal Finance > Taxes
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Does the IRS owe you?
Unclaimed 1998 tax refunds expire this year, but you must file to get yours.
February 27, 2002: 2:11 p.m. ET
by staff writer Leslie Haggin Geary

graphic NEW YORK (CNN/Money) - Talk about an incentive to file your taxes.

The IRS has more than $2.3 billion in refunds for 1.7 million individuals who didn't file their 1998 income tax returns. But it may soon be too late to claim the cash. In order to collect the money, 1998 returns must be filed with the IRS by April 15.

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"Time is running out for individuals to take steps to claim this money," IRS Commissioner Charles O. Rossotti said.

Federal law gives taxpayers three years to claim a refund. After that, the money becomes the property of Uncle Sam. (You can download the 1998 Form 1040 and return instructions at the IRS Web site at www.irs.gov.)

So how could so many fail to claim their refunds? In many cases, individuals had no idea they were owed anything because they made too little to have to file a return.

But they were owed a refund because they had taxes withheld from their wages. (In 1998, single filers under age 65 were exempt from filing if their gross income was less than $6,950; married couples under age 65 didn't have to file if they earned less than $12,500.)

Of course, there are those who just never bothered filing a return. There is no penalty for filing a return late that qualifies for a refund.

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In California, some 181,000 individuals failed to file their 1998 taxes, and the IRS estimates that, all told, non-filers in the Golden State are owed an estimated $221.6 million in refunds. Texas, with 135,900 non-filers, has the second highest delinquency rate. Many of those residents are due a total of $181.9 million in refunds.

And many Americans who live abroad also neglected to file returns. In fact, some 4,500 Americans living overseas may be due the fattest refunds of all -- $904 on average.

But for those entitled to unclaimed refunds, most will receive less than that - about $498 on average, the IRS said. graphic

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