Filing Taxes: Top Ten FAQ

Questions:

• How long should I keep my tax papers?
• How long should I worry if I haven't filed tax returns that I should have filed?
• If I can't pay my taxes, should I file my return anyway?
• Can I get an extension to pay a tax without penalties and interest?
• My state had an amnesty period for nonfilers. Can I ever hope the IRS will have one?
• Who has access to my IRS file?
• Is it true that the IRS pays rewards for turning in tax cheaters?
• What should I do if I don't get my refund?
• Can the IRS charge me interest if I was incorrectly sent a refund and the IRS now wants it back?
• How legitimate are the claims by "tax experts" that you don't have to pay income taxes?

Answer:

Can the IRS charge me interest if I was incorrectly sent a refund and the IRS now wants it back?

It depends. The Internal Revenue Manual states that "taxpayers should not be held liable for interest on … erroneous refunds if the IRS was clearly at fault … and the taxpayer is cooperative in repaying." However, if you caused the erroneous refund and now can't repay it, the IRS can and will charge interest.