I remember the days of state refunds being taxable when one itemized. I also remembered seeing new clients tax returns that they filed and more often than not these clients DID NOT claim those refunds from the prior year.

                                               AND...............................

They NVR received a notice from IRS stating they missed that refund. Oh, if they missed something BIG the IRS would include that refund BUT they never sent a notice for the refund only. 

Im thinking same thing here. But thats just my opinion. What are your thoughts?