When the IRS owes you, that money collects interest??

[USArmyParatrooper]

Last year when I was deployed my wife and I purchased a home. Of course, she almost all of the leg work through a power of attorney.

We decided not to wait until I came home because the timing was right. In 2009 we qualified for the $8000 first-time home buyer tax credit, interest rates were rock bottom (mine is locked at 4.875%) and home prices were also at rock bottom. And to top it off Fort Bragg has been expecting thousands of new troops from FORSCOM to arrive, which IMO is going to drive up housing costs.

The law also allowed us to file an addendum and apply the credit toward our 2008 taxes. Great! We don't even have to wait for the money, right?

I'll spare you the boring details, but many months and multiple phone calls later we still didn't get the money. After close to a year had gone by I called the IRS again and the guy on the phone was shocked and dismayed at how long it took.

He referred my case to a "tax advocate", an agency that only handles "special cases" and according to him they can actually get shit done. SO, a really nice woman from the agency called me a couple days later. "I'm contacting the IRS and they have 45 days to respond," she told me. At this point I wasn't even mad anymore. Exactly 45 days later she called me back and said they now have 30 days to resolve it. I actually laughed.

Finally, I just received a call today. They're sending a check for $8425 on Aug 6th. She said the extra $425 is interest the IRS owes me for the time they held on to my money!

Some Key Notes!

That's a higher IPR than any bank I've seen.

Apparently you're better off with Big Gubmint holding on to your money than a life insurance company.

[PBS Poll-435]

1. And now for a little irony, the interest that the IRS pays you is taxable. nt

[USArmyParatrooper]

2. lol Yep. And wouldn't it be better for everyone if they just paid me a bit less and called it even?

[midnight]

3. Glad a tax advocate was able to help you. I wonder if they

have been helpful to others as well.

[whyverne]

4. Reminds me of the time I didn't file for 5 years.

If you don't owe them money you don't have to file a tax return. Or if you don't need the money back right away. They pay you the money back plus interest when you finally file. Might be a good idea for anyone, like me, who have trouble saving money.

[TheDebbieDee]

5. Just don't wait more than three years after the return's due date

to file for a refund...........they don't have to give you a refund because the statute has expired.

But they will apply the statute refund if you have a balance due in a different year.