Personal Finance (Not Investing) • How Are IRS Interest Payments on Refunds Computed?

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With a check date of June 7, the start of the interest-paying period must be on or about April 23, which must be when the opened return landed at a workstation for processing.
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It's the other way around. The IRS need only pay interest through a date of their selection that's not more than 30 days before the date of the refund check. Section 6611(b)(2): https://www.law.cornell.edu/uscode/text/26/6611.

There's much more information about interest on overpayments in Section 6611.

Sorry, I'm not a lawyer. (Maybe you are?) So I can't reliably interpret the language in Section 6611 you linked.

Here's what the IRS says:

When does the IRS pay Interest?

Stop and Start Dates for Overpayment Interest

In general, we pay interest on the amount you overpay starting from the later of the:

• Tax return filing due date
• Late filed tax return received date
• Date we get your return in a format we can process
• Date the payment was made

We stop paying interest on overpayments on the date we refund your overpayment (and interest) or offset it to an outstanding liability.

Exception: We have administrative time (typically 45 days) to issue your refund without paying interest on it.

At an 8% interest rate, the IRS paid me 45 days of interest on a sum of $817.67.

That coincides with a period starting on or about April 23 to the check date of June 7. So it would appear that the start of the interest period was the date they got my return in a format they can process.

Do you disagree? If so, what is your explanation for the payment of 45 days of interest?

What other 45-day period makes sense?

Statistics: Posted by iceport — Sat Jun 15, 2024 3:02 am — Replies 13 — Views 1134

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