3,237 tax refund checks waiting for Arizonans

With national unemployment topping 10 percent, a lot of Arizonans could use some extra cash, and the Internal Revenue Service might just be the ticket.

In Arizona, the IRS has 3,237 refund checks worth more than $3.2 million that were returned by the U.S. post office due to mailing address errors. Nationally, 107,831 refund checks totaling more than $123.5 million are waiting for taxpayers to claim.

"These undelivered refunds ... deal with taxpayers who filed on time, who overpaid their tax and had a check mailed to the address they provided to the IRS," said Bill Brunson, IRS spokesman in Phoenix. "The check then was returned as undeliverable because the address wasn't valid any longer. The money stays with the government until the taxpayer provides a valid mailing address."

All a taxpayer has to do to update his or her address is visit www.irs.gov, call (800) 829-1954 or visit the Mesa IRS office at 1818 E. Southern Ave. Undeliverable refund checks average $1,178 per Arizonan this year, compared to $1,023 last year. Some taxpayers are owed more than one check.

"If a person doesn't respond to any sort of notice ... then (the refund) could stay on the books for 10, 20 or 30 years," Brunson said. "What generally happens is that the next filing season when the taxpayer submits their 2009 return and then they provide another mailing address, and as long as it's a good one, we will issue to them anything that we have on the books, any prior refunds coming to them, as well as the current refund if they have one coming for that particular period."

Electronically filing your tax return and selecting direct deposit for your refund can avoid any delivery problems, he said.

"It circumvents the postal system and therefore it can't get lost, it can't get stolen, and it can't get returned as undeliverable because it goes right into their savings or checking account, and that can be 10 days to seven days, as little as a week," Brunson said.

Nationally, average undeliverable refunds rose by 16 percent this year, which is in line with the 16 percent increase in average refunds for all tax returns in the latest filing season. Several changes in tax law likely played a role in boosting refunds, including the first-time homebuyer tax credit, the recovery rebate credit and others.

"We are eager to get this money into the hands of taxpayers, so don't delay if you think you are missing a refund," Doug Shulman, IRS commissioner, said in a statement.