July 7, 2020
Allyson Versprille and Laura Davison explained in an article published on June 24 in Bloomberg Tax that taxpayers who are owed a refund may also get a second check this year if they took advantage of the July 15 extended filing deadline.
According to the Internal Revenue Service, individuals eligible for a refund who didn’t receive one by April 15 will get paid interest, accruing from the original April filing deadline to the date that the refund is issued. The interest rate is 5% through June 30 and 3% after that. The interest payment may come separately from the refund.
The announcement last Wednesday is an added bonus for taxpayers who waited to file after the IRS said it would extend the filing deadline by three months to give people more time to submit their tax paperwork amid the coronavirus pandemic. Generally, the IRS has 45 days to issue refunds before it has to pay interest, but because of the delayed filing deadline, it now has to pay interest on refunds sooner.
The IRS encouraged taxpayers to file by April 15, despite the later deadline, to get their refunds sooner and so that the agency could have up-to-date bank account and address information for stimulus payments. Despite that recommendation, millions of taxpayers have yet to file and some could end up benefiting financially for waiting.
Slow-moving tax filers could also see the deadline extended a
second time
. Treasury Secretary Steven Mnuchin said last Tuesday he may consider an additional delay, though that wasn’t currently his intention. Mnuchin could extend the due date administratively, meaning he wouldn’t need Congress to approve the change.
The IRS has faced pressure from employees represented by the National Treasury Employees Union and conservative groups, including the National Taxpayers Union, to delay the filing deadline.
The agency has slowly started bringing thousands of workers back to its offices so they can begin working through a massive backlog of paper returns. All employees who can’t perform their jobs from home and haven’t yet been recalled will return to their work sites July 13, the agency previously announced.
Stay safe,
David Gibbs, CPA, CCIFP, MBA
Partner
McCarthy & Company
Source: Procrastination May Pay This Tax Season, IRS says. Allyson Versprille and Laura Davison. Bloomberg Tax. June 24, 2020.
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