Monday, August 25, 2008

Interest On Refunds

I personally never thought of that interest is teid to your tax refund. If you are due a refund, you may get interest on it. If the refund is made within 45 days after the due date of your return, no interest will be paid. If you file your return after the due date (including extensions), no interest will be paid if the refund is made within 45 days after the date you filed. If the refund is made within 45 days-period, interest will be paid from the due date of the return or from the date you filed, whichever is later.
Accepting a refund check does not change your right to claim an additional refund and interest. File your claim within the period of time that applies. If you do not except a refund check, no more interest will be paid on the overpayment included in the check.Interest on erroneous refund- On the flip side, all the interest you were charged on an erroneous refund generally will be forgiven. Any interest charged fior the period before demand for repayment was made will be forgiven unless:

1. You caused the erronoius refund in any way
2.The refund is more than $50,000

Say for instance, the IRS send yo a refund for $1000 but it shoudl have been for only $100, you don't have to pay the interest but you will have to pay the $900 back to the IRS will they request it.

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