The Internal Revenue Service (IRS) warned, just a few days ago, that more than 1.1 million people in the United States have until April 15 to file their tax year 2021 returns and claim unclaimed refunds, the total value of which exceeds $1 billion. According to the federal agency, those who do not comply will lose the right to these funds, which will go to the US Treasury.
Basically, the fact that that money becomes the United States Treasury means that the federal government will appropriate it. In other words, unclaimed money is being given away to the nation, so Donald Trump and his administration can freely use it because, well, no one claimed it.
Taxpayers with pending refunds must act urgently
The average projected return is $781, however this varies based on other credits such as the Recovery return Credit. The laws allow a maximum of three years to obtain reimbursements before the resources are handed to the federal government. California tops the list with 116,300 prospective beneficiaries, followed by Texas (102,200) and states like New York, Florida, and Pennsylvania.
The IRS underlined that, in addition to losing the refund, taxpayers may lose access to benefits such as the Earned Income Tax Credit (EITC), which in 2021 could be worth up to $6,728 for families with children. Those who owe taxes, child support, or school loans may have their payments withheld to meet their responsibilities.
Where is my refund and how long does it take to arrive?
The government recommended utilizing the “Where’s My Refund?” site to track the progress of requests. The system displays three phases: return received, refund authorized, and reimbursement dispatched. According to the IRS, updates occur once each day, generally overnight.
Electronic refunds are normally handled in up to 21 days, while postal returns take four weeks or more. If adjustments are necessary, the deadline might be extended to 16 weeks. The IRS made improvements to lessen delays in 2024, and beginning in 2025, duplicate dependents may be claimed if a valid Personal Identification Number is provided.
The IRS MATH 2025 Bill to mandate clarity in notifications of tax errors
Senators Elizabeth Warren and Bill Cassidy sponsored the Internal Revenue Service Math and Taxpayer Help Act of 2025 (IRS MATH Act), which proposes to change the 1986 Tax Code to make the IRS more open in its reporting of mathematical or administrative mistakes. The plan requires letters to include the kind of mistake, the appropriate legislative provision, the precise line item on the impacted return, and a breakdown of changes into categories such as gross revenues, tax credits, or sums outstanding.
Furthermore, messages must be written in straightforward English, with visible deadlines for challenging (bold and size 14) and contact information. It is illegal to identify “potential errors” without confirmation, and any particular faults found must be stated.
The project requires the IRS to inform any adjustment (abatement) made in writing, describing the changes in the adjusted items and ensuring that the wording is clear. Taxpayers may seek reviews in writing, via phone, through digital platforms, or in person, using processes that the Treasury must develop within 180 days after approval. The new laws would go into effect 12 months after they were enacted, and would only apply to notifications issued after that time. This is meant to prevent typical misunderstanding, such as inexplicable refund decreases, and to expedite disputes.
As evidence, the IRS must send a statistically meaningful number of notices by certified mail with electronic receipt confirmation every 18 months. The Treasury, in collaboration with the Taxpayer Advocate, will submit to Congress information such as the number of mistakes found, corrected amounts, response rates, and the efficacy of the notification approach.
The study will contain findings about the usage of certified mail as well as suggestions for improving communication. This program tries to determine if formal delivery techniques enhance taxpayer attention while reducing lengthy litigation.