Question

A calendar year taxpayer files his 2016 Federal income tax return on March 4, 2017. The return reflects an overpayment of $6,000, and the taxpayer requests a refund of this amount. The refund is paid on May 16, 2017. The refund need not include interest.

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Answer 1

The taxpayer's refund was processed within the IRS's 45-day window; thus, the refund correctly did not include interest.

Step-by-step explanation:

The question refers to the situation where a taxpayer filed their Federal income tax return on March 4, 2017, for the tax year 2016 and requested a refund for an overpayment of $6,000. The IRS issued the refund on May 16, 2017. According to the IRS rules, tax refunds processed within 45 days of the tax filing deadline (usually April 15th) are not subject to interest. Since the refund in this scenario was issued within this timeframe, it is correct that the refund need not include interest.