Recently, I applied for a position with the IRS as a Revenue Officer. It wasn’t until after I read what they do that I decided that it wasn’t for me. Basically, a Revenue Officer is the Government’s bill collector. They are the ones on the front line that go to businesses and individuals to collect past due tax bills, even if it means seizing property. Want to know what the deciding factor was for me? They are not allowed to carry weapons. You mean to tell me that I am going out to some guys business (that he built over the past 30 years) to seize his property without a gun? Are you kidding me? Don’t you think he will do almost anything to protect his business?

I told you all of that to talk about a story that I read yesterday. Apparently, a Texas restaurant owner has been sentenced to 2 years in jail for trying to offer an IRS agent free pizza and a job. I guess he was a more friendly business owner.

It all started when, you guessed it, the owner decided to not pay his taxes. He owed $49,000 in back taxes for the years 2004 to 2007. When the IRS agent showed up, the owner offered the agent $2,500 (and all the pizza they wanted) in exchange for having the tax liability reduced from $49,000 to around $500. During these subsequent meetings, the IRS agent recorded their conversations and that was all that was needed for a conviction. The owner is a citizen of India and will be deported after his sentence is up.

So to those who think they can bribe their way out of a tax liability, think again!

According to the IRS, there are around $1.3 billion in unclaimed refunds from the 2005 tax year. These unclaimed funds are for individuals who did not file a tax return in 2005. Due to the three-year look back, individuals have until April 15th, 2009 to claim these refunds or they may be gone for good.

IRS Commissioner Doug Shulman says, “especially in these tough economic times, people should not lose out on money that is rightfully theirs. People should check their records, especially if they had taxes withheld from their paychecks but were not required to file a tax return.  They may be leaving money on the table, including valuable tax credits that can mean even more money in their pockets.”

The IRS estimates that half of those that could claim these refunds for the 2005 tax year would receive more that $581. Many of the individuals in this category had too little income to file a return but had taxes withheld from their wages or paid quarterly estimated taxes. There is no penalty assessed by the IRS for filing a late return qualifying for a refund.

Many low-income workers may not have claimed the Earned Income Tax Credit (EITC) or even knew about it. Unmarried individuals that earned less than $35,263 in 2005 and had more than one qualifying child are eligible for the credit. Keep in mind that you must have earned income and not be able to be claimed by someone else in order to qualify for the credit. If you are single with one child the threshold is $31,030. If you are single with no children and at least 25 years old, you can qualify for the EITC with less than $11,750 in income. The rule on being claimed as a dependent also applies. These numbers are slightly increased for individuals filing married filing jointly.

Double check your 2005 taxes and make sure you filed if you were due a refund. If you didn’t file, get those returns in by April 15th of this year to get what you are owed!