Week in Insights: IRS Is Happy to Trade Refunds for Compliance

Curated by Daniel Xu

Nearly 940,000 taxpayers are owed over $1 billion total in unclaimed refunds for tax year 2020, and the deadline to submit a return is May 17. You’d think the IRS would want to quietly pocket the unclaimed refunds, but it has good reason to motivate all taxpayers to file.

The US tax system operates on a voluntary basis—each taxpayer must report their income and calculating tax liabilities without direct government involvement. The IRS may have some questions if their calculations on how much you owe differs from yours, but taxpayers are responsible for reporting and remitting ...