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Individual Tax

Interest on Individual Refunds to run from April 15

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

On its website, the IRS says overpayment interest, on individual 2019 refunds with respect to returns filed by July 15, will run from April 15 until the date of the refund.

Background.

Interest is allowed and paid upon any overpayment in respect of any internal revenue tax. (Code Sec. 6611(a))

The interest is allowed and paid, in the case of a refund, from the date of the overpayment to a date (to be determined by the IRS) preceding the date of the refund check by not more than 30 days, whether or not such refund check is accepted by the taxpayer after tender of such check to the taxpayer. (Code Sec. 6611(b)(2))

If any overpayment of tax imposed is refunded within 45 days after the last day prescribed for filing the return of the tax (determined without regard to any extension of time for filing the return) or, in the case of a return filed after such last date, is refunded within 45 days after the date the return is filed, no interest shall be allowed under Code Sec. 6611(a)) on such overpayment. (Code Sec. 6611(e)(1))

For individuals, the date of overpayment of income taxes is the due date of the income tax return, without regard to extensions. (Code Sec. 6611(d)Code Sec. 6513(a)) Overpayments are shown on Form 1040 as a refund. (Instructions for Form 1040)

The due date for an individual’s income tax return is April 15. (Code Sec. 6072(a)) But due to COVID-19, for an individual, the due date for filing Federal income tax returns for the 2019 tax year has been automatically postponed to July 15, 2020. (Notice 2020-18, 2020-15 IRB 592, see IRS makes official announcement of filing deadline postponement (03/23/2020) )

Interest from April 15.

On its website, IRS says, “Interest on individual 2019 refunds reflected on returns filed by July 15, 2020 will generally be paid from April 15, 2020 until the date of the refund.”

The IRS notes that interest payments may be received separately from the refund.

To continue your research on interest on overpayments, see FTC 2d/FIN ¶T-8000 et seq.; United States Tax Reporter ¶66114.

 

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