How To Have the Government Pay You Money
… sort of. What happens when the government owes you your overpaid tax money and they don’t get it to you in a timely manner? No, your congressional representative does not send you flowers and a thank you note. Better yet, you’re entitled to interest on your money. According to the internal revenue service’s “Notice 746″, they are supposed to pay you interest at the same rate as they charge when you don’t surrender your money to them in a timely manner. The rate, compounded daily, varies from year-to-year. Over the past decade, it’s been between 4 and 8%. But what the rules say and what the irs does aren’t necessarily the same thing. Surprised?
Back in 2001, the irs made a slight mistake and took $12,000 more from me than they should have. Thank goodness, they are so conscientious about righting wrongs. Otherwise, I wouldn’t have been fighting to get it back ever since. Oh what! Yes, I have! You would think that the interest on this financial faux pas would be a good chunk of change (almost $6,000 by my calculations). Instead, last month I finally received a check as an interest payment for … wait for it … almost $600. Yesterday, I received another letter from the IRS. But instead of another check for interest or the rest of the money they still owe me or a dinner invitation, they graciously had sent a 1099 form. In other words, they want me to declare the $600 as income so they can tax that as well. It’s as if they said, “Sorry about holding onto your money for so long and making it difficult to get back. But you know that pittance we sent to you last month? We want some of it back! Got to pay off that trillion dollar deficit somehow.”
You know, if I had put that $12,000 in a bank at 3% interest back in 2001, I would’ve earned over $2700 by now. In that case, I could understand the government wanting to take its cut of my money. Yet, how can they take money that they owed me to begin with? It’s not like I willingly gave the irs $12,000 to hold for me as an investment. (And I’ve made some bad investment decisions in the past.) So I don’t understand how the scenario is even possible. The worst part about all of this? I don’t really seem to have any recourse in this matter … unless somebody out there knows otherwise. Maybe I’ll get luck and they’ll put me on the “Jelly of the Month” club — this month’s flavor: KY.
Yes, I know ‘irs’ is supposed to be capitalized. I tend to capitalize what I respect…
Popularity: 8% [?]
… sort of. What happens when the government owes you your overpaid tax money and they don’t get it to you in a timely manner? No, your congressional representative does not send you flowers and a thank you note. Better yet, you’re entitled to interest on your money. According to the internal revenue service’s “Notice 746″, they are supposed to pay you interest at the same rate as they charge when you don’t surrender your money to them in a timely manner. The rate, compounded daily, varies from year-to-year. Over the past decade, it’s been between 4 and 8%. But what the rules say and what the irs does aren’t necessarily the same thing. Surprised?
Back in 2001, the irs made a slight mistake and took $12,000 more from me than they should have. Thank goodness, they are so conscientious about righting wrongs. Otherwise, I wouldn’t have been fighting to get it back ever since. Oh what! Yes, I have! You would think that the interest on this financial faux pas would be a good chunk of change (almost $6,000 by my calculations). Instead, last month I finally received a check as an interest payment for … wait for it … almost $600. Yesterday, I received another letter from the IRS. But instead of another check for interest or the rest of the money they still owe me or a dinner invitation, they graciously had sent a 1099 form. In other words, they want me to declare the $600 as income so they can tax that as well. It’s as if they said, “Sorry about holding onto your money for so long and making it difficult to get back. But you know that pittance we sent to you last month? We want some of it back! Got to pay off that trillion dollar deficit somehow.”
You know, if I had put that $12,000 in a bank at 3% interest back in 2001, I would’ve earned over $2700 by now. In that case, I could understand the government wanting to take its cut of my money. Yet, how can they take money that they owed me to begin with? It’s not like I willingly gave the irs $12,000 to hold for me as an investment. (And I’ve made some bad investment decisions in the past.) So I don’t understand how the scenario is even possible. The worst part about all of this? I don’t really seem to have any recourse in this matter … unless somebody out there knows otherwise. Maybe I’ll get luck and they’ll put me on the “Jelly of the Month” club — this month’s flavor: KY.
Yes, I know ‘irs’ is supposed to be capitalized. I tend to capitalize what I respect…
Popularity: 8% [?]
Written by sprezzaturon in: beijing,pork spenders |2 Comments »
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I didn’t know that the IRS was supposed to pay interest on overpayment of taxes. It makes sense of course, because they charge interest and penalties to taxpayers if payments fall short.
It is simply unbelievable that they are trying to collect taxes on reimbursements like that, although coming from the IRS this probably should not be too surprising. This is one more reason why this agency needs to be dismantled as soon as practically possible.
Hello Karl! As long as elected officials can get away with spending on teapot museums and other pork barrel projects, they’ll keep their collection agency in place. Too bad taxpayers couldn’t go on strike …