Over 1.1 million people countrywide have unclaimed refunds for the 2021 tax year, according to the Internal Revenue Service (IRS), but they have until April 15 to file their tax forms. As the IRS estimates were recently disclosed, taxpayers who have not yet submitted their Form 1040, Federal Income Tax Return, for the 2021 tax year are still owed more than $1 billion in refunds. Moreover, the federal agency predicts that the average return in 2021 will be $781. That means half of the reimbursements exceed $781 and half are less. This estimate excludes the recovery rebate credit and any additional credits that may apply.
The Internal Revenue Service (IRS) urges to claim one billion dollars that have yet to be paid
The legislation typically gives taxpayers three years to file their returns and get their money back. The U.S. Treasury Department will own the funds if they don’t file within three years. People who fail to file a tax return run the danger of losing more than just the 2021 tax refund for taxes paid or withheld. A large number of workers with low and moderate incomes may qualify for the Earned Income Tax Credit (EITC). Eligible taxpayers with children could receive up to $6,728 in 2021. For people and families with incomes below specific levels, the EITC assists. It is important to note that the 2021 cutoff points were:
- $51,464 ($57,414 if married filing jointly) for those with three or more eligible children;
- $47,915 ($53,865 if married filing jointly) for those with two eligible children;
- $42,158 ($48,108 if married filing jointly) for those with one eligible child; and
- $21,430 ($27,380 if married filing jointly) for individuals with no eligible children.
The IRS is advising taxpayers seeking a refund of their 2021 taxes that if they haven’t filed their 2022 and 2023 tax returns, their refunds may be withheld. In addition, any 2021 refund will be applied to any outstanding balance owed to the IRS or a state taxing authority. Unpaid child support or other past-due federal bills, including student loans, may also be applied to the refund. Tax forms and instructions for current and prior years, including the 2021 1040 and 1040-SR forms, can be found on the IRS.gov Forms and Instructions website or by calling the IRS toll-free at 800-TAX-FORM (800-829-3676).
The IRS will put on hold modernization to address AI’s potential impact
A top IRS technology official told Reuters that the US Internal Revenue Service (IRS) has declared a strategic pause in its technology modernization efforts to reassess its strategy in light of developing AI technologies. One of the projects being examined is the Direct File system, a free tax filing website that was introduced in 2024. The decision to stop additional investments coincides with the IRS’s investigation into the integration of AI to improve operations and efficiency. Reports of possible workforce reductions have coincided with the hiatus; the agency plans to lay off 20% to 25% of its 100,000 employees.
There is no predetermined goal for worker reductions, the IRS official said, characterizing the review as a chance to realign the workforce with those new business practices. Scott Bessent, the US Treasury Secretary, has already stated his belief in AI’s potential to enhance customer service and tax collection. He hasn’t, however, mentioned any employment or financial ramifications of AI adoption. The IRS will continue to process tax returns and pay refunds on time, so the evaluation is not anticipated to affect the 2025 tax filing season. Following the 2022 Inflation Reduction Act, which originally allotted $80 billion over ten years for modernization, customer service, and tax enforcement, this development represents the most recent change in IRS investment strategy.
