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 estimated refund amount is $781, although it varies depending on additional credits such as the Recovery Refund Credit. The regulations establish a maximum period of three years to request refunds, after which the resources are transferred to the federal government. California leads the list with 116,300 potential beneficiaries, followed by Texas (102,200) and states such as New York, Florida, and Pennsylvania.
The IRS emphasized that, in addition to losing the refund, taxpayers could stop accessing benefits such as the Earned Income Tax Credit (EITC), which in 2021 reached up to $6,728 for families with children. Those who owe taxes, child support or student loans could have their funds withheld to cover those obligations.
Where is my refund and how long does it take to arrive?
The agency urged using the “Where’s my refund?” tool to monitor the status of requests. This system shows three phases: return received, refund approved or refund sent. Updates occur once a day, usually overnight, according to the IRS.
Electronic returns are typically processed in up to 21 days, while mailed returns take four weeks or more. If corrections are required, the deadline may be extended to 16 weeks. For 2024, the IRS implemented adjustments to reduce delays, and starting in 2025 it will allow duplicate dependents to be declared if a valid Personal Identification Number is included.
The IRS MATH 2025 Bill to mandate clarity in notifications of tax errors
The Internal Revenue Service Math and Taxpayer Help Act of 2025 (IRS MATH Act), introduced by Senators Elizabeth Warren and Bill Cassidy, seeks to amend the 1986 Tax Code to require the IRS to be more transparent in its reporting of mathematical or administrative errors. The proposal states that notices must detail the type of error, the applicable legal section, the specific line item on the affected return, and a breakdown of adjustments into items such as gross receipts, tax credits, or balances owed.
In addition, communications must be written in plain language, include prominent deadlines for challenging (in bold and size 14) and provide contact numbers. It is prohibited to list “potential errors” without confirmation, requiring that all specific errors detected be specified.
The project requires the IRS to notify in writing any correction (abatement) made, explaining the changes in the adjusted items and guaranteeing clarity in the language. Taxpayers may request reviews by writing, telephone, digital platforms or in person, under procedures that the Treasury must establish within 180 days after approval. The new rules would take effect 12 months after enactment, applying only to notices sent after that period. This is intended to avoid common confusion, such as unexplained reductions in refunds, and expedite disputes.
As proof, the IRS must send a statistically relevant number of notifications by certified mail with electronic receipt confirmation, for 18 months. The Treasury, together with the Taxpayer Advocate, will report to Congress data such as the volume of errors detected, adjusted amounts, response rates and effectiveness of the notification method.
The report will include conclusions on the use of certified mail and recommendations to improve communication. This initiative seeks to evaluate whether formal delivery methods increase taxpayer attention and reduce protracted litigation.