IRS lost and found has $1.3B and counting

WASHINGTON, March 10 (UPI) -- The IRS said U.S. taxpayers who did not file 2006 tax reports are owed $1.3 billion in refunds that will disappear if they do not file by April 15 this year.

Tax refunds that are not claimed within three years are turned over to the Treasury Department, CNN reported Wednesday.

The backlog involves 1.4 million people who failed to file in 2006, despite the fact that the government owes them money. That includes 159,700 scofflaws-in-reverse from California, 109,600 from Texas and 101,700 from Florida, the IRS said.

Many of those owed money are those who could use it the most, said Elaine Smith, master tax adviser at H&R Block.

"A lot of those are dependents or younger people ... with part-time jobs," in other words those who made too little to require they file a tax return, but still had taxes taken out of their paychecks, she said.

"There's no real penalty for letting them keep your money for an extra amount of time, but if you owe (the IRS) then they will certainly penalize you and charge you interest," Smith said.