Few pieces of mail can get your attention as much as a letter 
from the Internal Revenue Service. Even in these times of tax 
refunds, you can't be sure if an envelope from the IRS brings 
bad news or a check from Uncle Sam. Now comes a new twist, a 
letter from the IRS may not be about your taxes at all. That's 
because the tax collector has offered to act as courier for 
people looking to match unclaimed assets with their owners.

With between $10 billion and $20 billion of funds lying 
unclaimed and placed in the hands of state and federal 
institutions, it is believed that around one American in 
eight is entitled to money they know nothing about. Only 
4 percent of those funds though are ever returned to their 
missing owners. 
 
To help reunite beneficiaries with their assets, the IRS is 
cooperating with private firms to mail notices of unclaimed 
benefits to beneficiaries. To use the service the sender must 
provide the IRS with your Social Security Number along with 
a cover letter explaining why they need the help of the IRS 
to locate you. The IRS will search its database for the 
account-owner and forward the letter on. This "People Search" 
service is free for up to 49 searches. To its credit the IRS 
does not give out your address to the sender or inform them 
whether or not you received the letter.

This Free People Search service is designed to help groups 
such as pension funds, banks and insurance companies notify 
account-owners and beneficiaries about assets that need to be 
distributed to their rightful owner. But the service may also 
be used by lawyers, accountants, estate trustees, and even 
family members looking to inform long-lost relatives that 
they're entitled to some assets.

No matter how well intentioned, this program by the IRS is not 
without controversy. Although the IRS demands documentation 
proving that the sender is acting legitimately, this program 
could easily fall prey to abuse since the IRS steps out of the 
picture once the message has been delivered.  Fraudsters could 
use the system to cheat people into paying fees to recoup 
unclaimed assets that don't exist. Alarmed also are privacy 
activists who complain that the IRS has no business using your 
personal information for any purpose other than to carry out 
their tax functions. 

If you receive a letter sent through the IRS informing you that 
you are the lucky owner of assets unknown to you - act with 
caution. In general, you should not pay a fee - and almost 
certainly not an advance fee - to claim those assets, so any 
demand for cash up front should raise a red flag. Research 
the institution claiming to owe you money and contact them 
directly before giving them any of your personal or financial 
information.