The Internal Revenue Service is urging taxpayers to take a moment before they file their income-tax returns to be sure they received all benefits to which they are entitled.
"Many taxpayers are missing out this year on the special telephone-excise tax refund and other benefits such as the Earned Income Tax Credit," according to IRS Commissioner Mark W. Everson. "If you don't claim it, you don't get it. That's money down the drain for millions of Americans."
In addition to the above two items, many taxpayers also overlook free services available to them, such as free tax help and the Free File program.
Still others lose out by not filing a return. Even if a taxpayer does not owe tax and is not required by law to file a return, he or she may miss out on a refund or tax credit that is available.
The following are five refunds, credits or services that taxpayers should pay attention to:
· Telephone-Excise Tax Refund: In Pennsylvania so far this year, 2,459,921 returns have been received with only 1,655,898 refunds requested; 32 percent of Pennsylvania taxpayers are missing this refund, leaving more than $24 million dollars on the table.
This is a one-time refund of long-distance excise taxes available on 2006 income-tax returns. The refund applies to charges billed from March 2003 through July 2006. The IRS offers a standard refund amount of $30 to $60, or taxpayers can calculate the actual tax paid.
Even if the taxpayer does not normally have to file a return, Form 1040EZ-T can be used to request this refund. Businesses and exempt organizations can also request it. (Taxpayers can visit www.IRS.gov for more information on this special payment.)
· IRS Free File: Last year in Pennsylvania, 4,021,341 taxpayers were eligible for Free File, but only 214,069 took advantage of the program.
Nearly 20 companies are offering free electronic filing to taxpayers whose 2006 adjusted gross income was $52,000 or less. That means 70 percent of all taxpayers — some 95 million individuals — can take advantage of the IRS-sponsored Free File program. A link to Free File offerings is located on the IRS.gov homepage.
· Earned-Income Tax Credit: In Pennsylvania, 748,246 taxpayers have claimed EITC so far this year. The percent of eligible taxpayers not taking this tax credit ranges from 20 percent to 25 percent.
Earned income of less than $39,000 in 2006 may qualify a taxpayer to claim the earned-income tax credit. This credit could be worth up to $4,536. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.
To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return. An electronic special EITC assistant is available on IRS.gov to help taxpayers determine whether they are eligible. Taxpayers can access more information on this credit by visiting the Web site and clicking on "1040 Central."
· Free Tax Help:In Pennsylvania last year, 935,308 taxpayers were eligible but only 80,336 took advantage of this service.
Tax-help sites in libraries, churches, community centers and other locations are staffed by trained volunteers. Taxpayers who earned less than $39,000 and file a simple tax return can call 1-800-829-1040 to locate the nearest Volunteer Income-Tax Assistance Program site.
In addition, senior citizens can take advantage of the free IRS Tax Counseling for the Elderly program by calling 1-800-829-1040 or AARP's Tax-Aide counseling program at 1-888-227-7669.
· Unclaimed Refunds: Estimates for Pennsylvania show 61,300 taxpayers may have more than $73.84 million in unclaimed refunds.
Refunds totaling approximately $2.2 billion are waiting for approximately 1.8 million people who failed to file a federal income-tax return for 2003. In order to collect the money, a return for 2003 must be filed no later than this April 17.
The IRS estimates that half of those who could claim refunds would receive more than $611. In some cases, individuals had taxes withheld from their wages, or made payments against their taxes out of self-employed earnings, but had too little income to require filing a tax return.