By Robert Steere, Toolkit Staff Writer

Have you been waiting and wondering why you haven't received the tax refund that you have been expecting? Well, it could be that the IRS just can't find you. The Internal Revenue Service is looking for a few good taxpayers (a lot, actually) who are due to receive a combined $123.5 million. They are sitting on 107,831 refund checks that were returned to the IRS by the U.S. Postal Service due to mailing address errors.

"We are eager to get this money into the hands of taxpayers, so don't delay if you think you are missing a refund," said IRS Commissioner Doug Shulman. "The sooner you update your address information, the quicker you can get your refund."

If you have changed your address recently, all you need to do is update your address once. The IRS will then send to you any and all refund checks they have for you. The average amount of an undeliverable refund check this year is $1,148. This represents a 16 percent increase compared to last year's average undeliverable refund of $990. Some taxpayers are due more than one check, and, obviously, some are due substantially more than the average.

The 16 percent increase in the value of an average undeliverable refund is in line with the 16 percent rise in average refunds overall for all tax returns in the filing season just ended. A number of changes to the tax laws probably played a role in raising the average amount of refunds, including the first-time homebuyer tax credit and the recovery rebate credit.

Nearly all refund checks mailed out by the IRS each year reach their rightful owner. Only a very tiny percentage are returned by the U.S. Postal Service as undeliverable. If you did not receive a refund check you were expecting, it may have been returned to the IRS as undeliverable if there was a problem with your address. If so, you can generally update your address with the "Where's My Refund?" tool on the IRS website. The tool enables you to check the status of your refund. You must submit your social security number, filing status and amount of refund shown on your 2008 return. The tool will provide the status of your refund and in some cases provide instructions on how to correct delivery problems.

If you check on a refund over the phone you will be given instructions on how to update your address. You can access a telephone version of "Where's My Refund?" by calling 1-800-829-1954.

In a related matter, the IRS encourages taxpayers to choose direct deposit when they file their returns because it puts an end to lost, stolen or undeliverable checks. Taxpayers can receive refunds directly into personal checking or savings accounts. Direct deposit is available for filers of both paper and electronic returns.

The IRS also encourages taxpayers to file their tax returns electronically because e-file eliminates the risk of lost paper returns. E-file also reduces errors on tax returns and speeds up refunds. E-file coupled with direct deposit is your best option; it's easy, fast and safe.

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Posted November 5, 2009.