Why doesn't the IRS pay us interest?

Question

If we are late on our taxes we pay interest to the IRS. Is there a date that the IRS must pay us back our tax return refund before they pay us interest?

Answer 1

Yes, there is. Code Section 6611(b). For income tax returns, the answer is basically 45 days with some qualifications. To receive interest the time frame between the return being filed (or original due date, whichever is later) and issuance of the refund would have to be over 45 days.

People who receive their deposits via direct deposit have a turn around of a few weeks. Paper forms are typically done within a 6 week time frame.

In a nutshell - File before April 15th and your refund would have to be coming in June to have interest. File after April 15th and you'd have to be out 45 days.

Corporations who filed for the phone excise tax refund on their 2006 returns received interest on their previously paid taxes.

Interest does occur, but it isn't that frequent.

Anyone claiming it doesn't isn't familiar with the actual Internal Revenue Code which clearly states that Interest on overpayments is allowed.

Answer 2

The law says they pay no interest for refunds made within 45 days of filing. That would be June 1 for most of us. If your refund is held up past that date for some reason you will get interest too. The interest is taxable income in year received.

Answer 3

Yes there is. I'm not sure just how long it is, something like 60 or 90 days, but I have received interest from them. Note - you get a 1099-int from them the next year, and have to declare the interest on the next year's return.

If your refund is late because of something you did wrong, like filed late, then you don't get the interest.

Answer 4

There's an old saying. "Don't steal, the IRS hates competition." The IRS only know how to take...not give

Answer 5

The IRS collects, it does NOT pay out.

Answer 6

It is your government at their finest!!