Interest on Refund


Today TaxMama® hears from Stan in the TaxQuips Forum, with a valid question. “In October 2011, an amended Estate Tax return was filed. The IRS did not complete their review until the beginning of April 2013. However, they are only showing interest payable for 53 days.”

                         

Dear Stan,

Bill Porter, our EA from the Twin Cities, MN asks, why did it take over 18 months for the IRS to process it?

IRM 20.2.4.3(2) states: “Interest on payments made on or after the return due date is allowed from the received date of the payment, delinquent return received date or return processible date, whichever is later.”

If it took over 18 months, I suspect that the amended return was not ‘processible’ for most of that time period. The interest payable for 53 days was for after it became ‘processible’.

On the other hand, the IRS is known to make mistakes when it comes to interest and penalty computations. So, if it wasn’t a matter of your having filed an incomplete return that needed more clarification, follow some of the steps TaxMama® provided in her reply.

And remember, you can find answers to all kinds of questions about interest on refunds and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

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