Why there’s nearly $26 million in unclaimed tax refunds in Washington

It’s that time again. For many of us, tax season means stress, hassle and avoidance.

Tens of thousands of Americans just don’t do it. Every year. And most of them don’t realize they’re missing out on some serious cash. The IRS estimates there’s nearly $1 billion in unclaimed refunds, just for 2012. That’s $26 million in Washington state and half of those refunds are for more than $700.

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Janet Lam-Rogers, a volunteer tax preparer with the AARP, says the main reason people don’t file their tax returns is they’re worried they owe the IRS.

“They’re reluctant to go in and they procrastinate. Then, they find out they’re already late and they just don’t want to deal with it,” she said. “And so they wait a year and then it piles on. And once they haven’t filed one, they wonder, ‘Well, what am I going to do now? Do I start filing? Are there problems with it?'”

Lam-Rogers works with the free tax prep service out of the Ballard Library, one of dozens all over the greater-Seattle area. She says people really ought to come in and, at least, meet with a volunteer tax preparer.

“I would say 9 out of 10 people who come in with previous years’ returns end up having a refund that they did not know was going to be there for them,” Lam-Rogers said.

Taxpayers get three years before they lose out on any refunds due. That’s why the focus is on 2012. It’s too late for 2011, but those who filed in 2012 have until this year’s regular deadline: Monday, April 18. And hey, it wouldn’t hurt to file for the other recent years, too.

It’s not only seniors who can use the free AARP service. Lam-Rogers has helped young adults who just entered the work force. And she says there’s no income bracket requirement, either.

Even though most people do discover the IRS owes them money when they access free tax prep services, plenty are still scared. Here’s another way to convince those stragglers. Let’s say you are the 1 out of 10 who does owe the IRS: Janet Lam-Rogers is not the IRS! She says anyone who doesn’t want to complete the process and file returns can simply stop.

Lam-Rogers encourages people to at least come on in and find out what their situation is. Plus, for those who owe and do decide to file, the IRS will work with people to come up with a payment plan.

She has one more piece of advice.

“Don’t wait until the last two weeks!” she said.

You might need to get another document or some piece of information like your bank routing number, so do not delay. Plus, the lines get very long during those last couple of weeks.

Free tax prep locations with AARP

Free tax prep locations with United Way of King County