Unless the envelope is orange-ish, most Americans don’t like seeing the IRS return address on a piece of mail. (The orange envelope contains a paper check for a refund.) Most folks know that if you don’t pay your tax bill by a certain date (or make arrangements for quarterly payments), the interest will begin to mount on what you owe. But does the IRS pay interest if they owe you money over a certain time?
Our family had some tax complications due to adopting children and moving around for my husband’s job with the military. Adopted children are initially assigned a temporary number, the ATIN, used on tax paperwork for up to two years while the parents sort out issues with Immigration & Naturalization, re-adoptions in home states (for international adoptions), and other paperwork that continues long after you’ve brought your precious child home.
Unfortunately, we received bad information from an immigration official who told us our sons would have to live in the US for two years before we could apply for their citizenship. It just so happened that we were stationed in the US when we got this erroneous info, so we waited the two years. The ATIN numbers expired, we finally got citizenship for them and passports as the US Army moved us back overseas.
Problem, we were now living overseas and filing our 1040 with the IRS, but we did not have social security numbers for our younger two sons. The Social Security Administration would not accept Citizenship documents, or US passports–they wanted birth certificates from a US state. Federal stuff was no good.
We tried registering foreign birth and had issues with our state of legal record because they wanted us to prove we were legal residents of that state at the time of the adoption. The state would not accept the letter from the US Army listing my husband’s legal address as also being my legal address as well. The fact that we both have drivers licenses from there, vehicles registered there, and even vote in elections there was not good enough proof. Eventually we had to hire a lawyer in our home state and adopt our children again (which was very confusing to them. They’d been with us for over two years. “Aren’t you already our parents?” “Are we your children or not?”).
This all took another two years during which we dutifully filed our tax returns and continued to list the expired temporary identification number. After we filed, the IRS would send a letter adjusting our return because they removed our two youngest children from their equation.
Finally, we received those social security cards in the mail. Yay! It was a day to celebrate. It was also a day to begin our amended tax returns for the past two years. The most recent year we owed money because our book sales and one investment took us over the edge to pay for the first time. That amended return only showed us owing less.
For the year before that, however, the IRS owed us $2000, as shown on the amended return. We received a white envelope with the IRS return address and opened it to good news; the letter affirmed the amount owed was $2000. There was no indication any interest would be paid.
Did the IRS pay us interest on the amount they had owed us for two years?
Yes, they did. When our orange-ish envelope came, I am pleased to report the total amount on the check included interest.
Makes me wonder about that audit from so many years ago. Turns out, years of interest only accumulate if you owe the IRS, because you’ve only got three years to file that amended return.
(Disclaimer: I am in no way a tax professional, and this blog does not constitute advice on tax issues. If you have a situation, please consult the IRS or your own personal tax professional.)
Kristin King is a paranormal fiction author, military spouse, and mother to four sons. She is contracting new covers for her vampire series, after which the first novel will become a free ebook. Rather than blogging about books and writing, which would make too much sense, she blogs about travel, food, living abroad, current events and other random topics.