Is IRS now paying interest on 2019 tax refunds?

[FEDUKE404]

Never mind.

[Rapid Robert]

Are they now paying (taxable) interest

Seems a shame to incur all the extra expense of paper-mailing Forms 1099-INT (or whatever IRS uses) next year for refund interest payments of $10 or more - (if we even still have a postal service by then).

This shows why IRS should have prioritized refund issuance for efiled returns, instead of delaying them until August (as has been discussed exhaustively in other threads at this forum). Now we taxpayers are bearing the unnecessary costs (interest and overhead).

[Rapid Robert]

I don't quite follow your logic as to how a 2019 tax return that was efiled on July 14th, with a refund payment date of August 5th, has been "delayed."

I wasn't referring to your example, your client got off easy. I thought you knew from the previous discussions here that many taxpayers have been waiting much longer than that.

I have one high income client, no dependents (so no refundable credits and no preparer due diligence or anything like that), who efiled successfully on MAY 23. They too are now finally showing a scheduled payment date of Aug 5, so that's about TEN WEEKS delay.

They made a $30K estimate payment in Sep 2019. Why almost a year later did the IRS still not know that it was a valid payment, until just a week or two ago? Their refund is almost $24K, and thanks to IRS poor management, we the taxpayers will now pay about $300 interest on that. Doesn't seem very efficient to me, even for the IRS.

Your situation with the amended 2017 return echoes my point, and coronavirus isn't even an excuse for that one.

[Rapid Robert]

Ooops, it's even worse than what I wrote. According to the link you posted, "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." So they are going back to Apr 15, even for those who filed much later, such as your July 14 client. Your client and mine are both getting a taxpayer-funded windfall (even though it's only a few dollars in your example - I am sure many others are getting much more).

And imagine all the paper filed returns sitting unopened, which if filed by July 15 (as most so far were) will be getting additional interest until the date of the refund, which could still be many months away.

I grant the IRS isn't to blame for the delay in paper filed return processing, but what is the excuse for straight-forward efiled returns that matched payments and W&I info already in the IRS online system from before March?