IRS keeps your refunds if you don’t file within 3 Years of Due Date

If you are owed a refund the only way to get the refund is to file the tax return within 3 years of the due date. Current tax law gives you 3 years to submit a tax return in order claim and receive your refund. If you file your return over 3 years late and are owed a refund you will not get the refund. Ouch, that can hurt. There are currently more than $1.4 Billion in unclaimed tax refunds.


For example, if you did not file your 2015 tax return (which was due April 15, 2016) and over paid your taxes by $2,000 through pay check deductions in 2015 or through extra quarterly estimated payments in 2015 you would have had to file your 2015 tax return by April 15, 2019 (3 years from due date of April 15, 2016) in order to get your $2,000 refund from overpayment in taxes in 2015.  The only exception is if you filed an extension before the 2015 due date of April 15, 2016. If you filed an extension then you have until October 15, 2018 to file your return to get your refund.


If you do not file a tax return for 10 years and then file 10 years of tax returns at once and are owed refunds for all 10 years, then you would only get your refunds for the most recent 3 years. You will have lost all opportunity to get the refunds on the returns that over 3 years old. That can be a shock to many taxpayers.


However, if you owe the IRS money from an unfiled tax return there is no limit (i.e., statute of limitations) for how many years can pass for the IRS to collect tax due for unfilled returns. So, if did not file a return for 10 years and then file 10 years of tax returns and owed the IRS money for each of those 10 years then you will have to pay the taxes for all those 10 years. On the other hand, if you file a return the IRS has a statute of limitations for how long they have in order to collect the taxes on that return (provided there is no fraud in the return).


The bottom line is to file those late returns as soon as possible, so you don’t miss the opportunity to get your tax refunds.