IRS Tax Refunds – and Separate Interest Payments
Some time ago the IRS announced that due to delays in issuing refunds, it will, in an unusual move, add interest to the amounts due to taxpayers. As many readers know all too well, refunds are very tardy this year. (We are aware of some who are creeping up on six months since filing who are still waiting.) This week the IRS issued news release IR-2020-183, explaining that most (but not all) interest will be paid separately from the actual tax refunds. It seems quite possible that in some cases the interest payments could arrive before the refund payments, which understandably could cause recipients to assume that the IRS reduced their refunds. The IRS continues to deal with a massive backlog, though, and odds are good that the payments will be issued together (or nearly together), but if not, receipt of the smaller payment first is not necessarily cause for concern.