Just a few days ago, the Internal Revenue Service (IRS) warned 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 totaling more than $1 billion. According to the federal agency, those who do not comply will lose their right to these funds, which will be transferred to the US Treasury.
Essentially, the fact that the money is in the United States Treasury means that the federal government will appropriate it. In other words, unclaimed money is being distributed to the nation, allowing Donald Trump and his administration to freely spend it because no one claimed it.
Taxpayers with pending refunds must act urgently
The average estimated refund is $781, but this varies depending on additional credits such as the Recovery Refund Credit. The regulations allow a maximum of three years to request refunds before the resources are transferred to the federal government. California tops the list with 116,300 potential beneficiaries, followed by Texas (102,200) and states like New York, Florida, and Pennsylvania.
The IRS emphasized 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 student loans may have their funds withheld to meet their obligations.
Where is my refund and how long does it take to arrive?
The agency recommended using the “Where’s My Refund?” tool to track the status of requests. The system displays three phases: return received, refund approved, and refund sent. According to the IRS, updates occur once per day, usually overnight.
Electronic returns are typically processed in up to 21 days, whereas mailed returns take four weeks or longer. If corrections are required, the deadline can be extended to 16 weeks. The IRS made adjustments to reduce delays in 2024, and beginning in 2025, duplicate dependents can be declared 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 introduced the Internal Revenue Service Math and Taxpayer Help Act of 2025 (IRS MATH Act), which seeks to amend the 1986 Tax Code to make the IRS more transparent in its reporting of mathematical or administrative errors.
The proposal requires notices to include 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.
Furthermore, communications must be written in plain language, with prominent deadlines for challenging (bold and size 14) and contact information. It is prohibited to list “potential errors” without confirmation, and all specific errors detected must be specified.
The project requires the IRS to notify any correction (abatement) made in writing, explaining the changes in the adjusted items and ensuring that the language is clear. Taxpayers can request reviews in writing, by phone, through digital platforms, or in person, using procedures that the Treasury must establish within 180 days of approval.
The new rules would go into effect 12 months after they were enacted, and would only apply to notices sent after that time. This is intended to prevent common confusion, such as unexplained refund reductions, and to expedite disputes.
As proof, the IRS must send a statistically relevant number of notifications via certified mail with electronic receipt confirmation every 18 months. The Treasury, in collaboration with the Taxpayer Advocate, will report to Congress information such as the number of errors detected, adjusted amounts, response rates, and the effectiveness of the notification method.
The report will include conclusions about the use of certified mail as well as recommendations for improving communication. This initiative seeks to determine whether formal delivery methods increase taxpayer attention while reducing protracted litigation.
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