Hi ,
I have received a US treasury check stating I over paid the taxes in 2005 and IRS is returning the money.
The problem is the amount of the check I received is close to 50% of the my pay for entire year. I never over paid the taxes.

I did my taxes for 2005 in March 2006 and I got my refunds. I talked to US treasury, IRS and ....every one says it is legitimate check and I must deposit in the BANK.

Can some one please suggest me what to do? I don't want to return the money unless they ask me.


Thanks,
Jingi

RickJ

Did they not also send to tell you an explanation of how you overpaid - so you can verify it?

Being that much, I too would be leery of spending it for fear of them coming back to say they made a mistake...so would definately push for an explanation.

In the meantime I'd definately put it in the bank to at least draw some interest.

jingi1234

That is what I was thinking.

I called all over US treasury, forgery, IRS and .....I got nothing. I got no letter with this (I got only US treasury check)

I was thinking put in the bank and earn interest (Don't spend !!!!) and if IRS comes and asks ...give them back......

sounds good right?

RickJ

Yes, sounds good...but when you got IRS on the phone and asked what/where the error was, what did they say? Was it just "we don't have that infomation"?

If that's the case, don't let it rest at that. Ask them how to go about finding out.

Not being sure what number you called for the IRS, try this one: 1-800-829-1040

Surprisingly, I called in March half thinking I'd never get a human on the line - or wait on hold for hours, but I got a human promptly and they faxed me my tax return within minutes. I was pretty amazed.

...If you don't get an answer, keep pushing: "ok, then who do I talk to to get the answer?"

AtlantaTaxExpert

All advice given is accurate. I have nothing to add.

Fr_Chuck

I would say what I would do in your case, not legal advice, just opiinion,

I would deposit it in a savings account and not spend it for several years just in case. Most obvious it is an error, and most likely they will want the money back, But often not cashing the check can also cause issues if they deside latter you owe the money, you have to prove you did not cash the check, It would be easier to merely write them a check for the money back.

AtlantaTaxExpert

I agree with Fr Chuck. You have made a good faith effort to notify the government that the check was issued in error.

Just save the money and collect the interest.

jingi1234

Thanks for all the advise. I had deposited the money and put it under high yield saving account.

I wrote a letter to IRS (notarized -> I kept a copy too) notifying the issue. If they come back to me I will simply write the check back.

My only concern is if IRS asks me any interest at their owing rate (around 7%?). I mean if we don't pay taxes before dead line and don't take extension IRS starts charging interest for the money that we owe to IRS.

That is the biggest problem.

Please suggest.

Thanks,
Jingi

RickJ

The IRS does not care much about good faith efforts...that's why I think you should be quite insistent on them showing you where the overpayment error was.

AtlantaTaxExpert

If you made a good faith effort and can prove (which you can with the certified letter) that you tried to notify them of the error, by law they cannot charge you interest if they later decide you need to pay the money back.

Keep trying to get to the bottom of the problem, but do not make it your life's mission.