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Still missing your tax refund? IRS could soon pay you more in interest
Grover Norquist on taxes, possible expansion of IRS
Americans for Tax Reform President Grover Norquist on the debt ceiling, taxes, spending and infrastructure negotiations and the possible expansion of the IRS.
Millions of Americans are still awaiting their tax refunds from the IRS, but there is a silver lining: The money may be accruing interest – and rates are poised to jump in October.
The Internal Revenue Service generally pays interest on refunds that are delayed by more than 45 days after the filing deadline, according to its website.
Interest rates are adjusted every quarter depending on the federal short-term rate. The current interest rate is 5%, but it is slated to increase to 6% on Oct. 1, the IRS announced this week.
Still, there is a downside, which is that the interest paid by the IRS is taxable.
IRS interest payments surged 33% in the fiscal year 2021, with the tax-collecting agency paying out nearly $3.3 billion for individual returns, the U.S. Government Accountability Office reported.
If you are still waiting for your refund, you can track its status using the IRS' Where’s My Refund tool.
As of late May, the IRS still had roughly 21.3 million paper returns that it still needed to process, according to a June report from National Taxpayer Advocate Erin Collins. That is a 7% increase from the same time last year, when there were 20 million unprocessed paper returns.
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