IRS guidance on interest netting procedures creates refund potential.Prior to Oct. 1, 1998, the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. charged taxpayers a higher rate of interest on tax underpayments than it paid to a taxpayer on tax overpayments. The Internal Revenue Service Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and Reform Act of 1998 changed this by providing for a net interest rate of zero to the extent a taxpayer has overlapping IRS tax overpayments and underpayments. Generally, this zero net interest rate applies to interest accruing on or after Oct. 1, 1998; however, it may apply to interest accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. before that date. Rev. Proc. 99-19 states that the zero net interest rate will apply to periods before Oct. 1, 1998, if the following conditions are met: 1. The applicable statute of limitations A type of federal or state law that restricts the time within which legal proceedings may be brought. Statutes of limitations, which date back to early Roman Law, are a fundamental part of European and U.S. law. (SOL) for the tax overpayment o·ver·pay v. o·ver·paid , o·ver·pay·ing, o·ver·pays v.tr. 1. To pay (a party) too much. 2. To pay an amount in excess of (a sum due). v.intr. To pay too much. was open on July 22,1998; 2. The taxpayer reasonably identifies and establishes the periods of tax overpayments and underpayments to which the zero net interest rate applies; and 3. The taxpayer requests that the zero net interest rate be applied to these periods before Dec. 31,1999. The applicable SOL for obtaining a refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies of underpayment interest is the later of three years from the time the return was filed or two years from the time the interest was paid; the applicable SOL for obtaining additional interest on an overpayment is six years from the refund date. Example: A calendar-year corporate taxpayer timely filed its 1992 and 1994 tax returns. After an IRS examination, the Service determines the taxpayer is entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to a $30,000 refund for 1994 and owes an additional $50,000 for 1992. On Sept. 1, 1997, the IRS refunds the $30,000 overpayment for 1994, with interest from March 15, 1995 (the date the 1994 return was filed) to Sept. 1,1997. On Oct. 1,1997, the taxpayer paid the $50,000 additional tax liability for 1992, with interest from March 15, 1993 (due date of 1992 tax return) to Oct. 1, 1997. The taxpayer is entitled to a refund if, on July 22, 1998, the overpayment limitation periods for both years were open. For 1994, the six-year period for claiming additional interest on the refund is open (Sept. 1, 1997 plus six years). For 1992, the two-year period for claiming a refund of interest on the additional tax liability is open (Oct. 1, 1997 plus two years). By requesting that the zero net interest rate be applied, the taxpayer will be entitled to a refund of the difference between the underpayment interest paid on $30,000 for the period March 15, 1997 to Sept. 1, 1995, and the overpayment interest computed and paid on $30,000 for the same period. Detailed procedures for filing a refund claim are set forth in Rev. Proc. 99-19. FROM JOHN KEENAN John Keenan is a fictional character in the BBC police drama HolbyBlue. The character is portrayed by actor Cal Macaninch. Overview John Keenan is a dedicated Detective Inspector at Holby South police station, willing to go to great lengths to uphold order and , J.D., WASHINGTON, DC |
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