Does anyone do anything different with return mail that contains annual interest statements, than what they do with return mail bank statements? Do we have any different responsibilities with these documents?

I am not aware that the IRS places any additional responsibility on the bank. You can either find them and forward to the correct address after normal security processes take place or you can't find them.

What is everone doing with just regular statements that are mailed out and returned undeliverable due to the forwarding address expired?

Find them and forward or destroy the statements in a reasonable period of time.

In your opinion, would you define a reasonable period of time?

As soon as I determined that I could not readily find the customer.

At our bank, upon getting return mail, depending on the reason (invalid address, cust moved, etc.) we will send the customer a change of address form and request that they update their address. If that comes back, we put them on a "return mail" status immediately and discontinue sending statements. If it doesn't come back, but the next month's statement comes back, we send another letter or attempt to call the customer and at that point put the account on return mail until the customer decides to call us.

As for tax forms. We simply check to make sure that we have attempted to contact the customer. If so, we simply hold it until they decide to call us.