IRS has $1.3B in unclaimed tax refunds. Time is running out to collect it

The IRS is holding onto more than $1.3 billion in unclaimed tax refunds for individuals who did not file a return in 2017 — money that will expire if those people don't collect it soon, the agency said Monday.

There are roughly 1.3 million taxpayers who are owed money, the IRS said, and are required to file a 2017 tax return in order to claim it.

"Time is quickly running out for these taxpayers," IRS Commissioner Chuck Rettig said in a statement. "There's only a three-year window to claim these refunds, and the window closes on May 17. We want to help people get these refunds, but they will need to quickly file a 2017 tax return."

2017 IRS income tax form. (FOX)

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The IRS delayed the tax-filing deadline to May 17 this year amid a slew of pandemic-related policy changes included in President Biden's $1.9 trillion coronavirus relief plan.

The agency announced last week that it also postponed the deadline for claiming 2017 federal refunds until May 17.

Taxpayers have three years from the filing deadline to claim the refund; if they do not file a return within three years, the money becomes the property of the U.S. Treasury. Americans who need to claim their refund must properly address, mail and postmark the return no later than May 17.

Half of the refunds that have yet to be delivered are worth more than $865, the IRS said. Still, the IRS warned individuals that if they didn't file a return in 2018 or 2019, they may not be eligible to receive their 2017 refund. Refunds can also be applied to cover certain federal debts that a taxpayer owes, including student loans or unpaid child support.