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Interest on tax refunds.

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freckley13
(@freckley13)
Advanced Member

Can anyone clarify how the interest works for tax refunds? I read that it's 12% is that the base percentage they add on to Antibes that is late? Does it get added on monthly?

For example. Tax return should be 7500 with interest Now will get 8400?

Can't seem to get any answers from the IRB.

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Topic starter Posted : June 10, 2011 4:02 pm
freckley13
(@freckley13)
Advanced Member

anyone receive refunds yet?

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Topic starter Posted : June 18, 2011 6:51 pm
piaa
 piaa
(@piaa)
Trusted Member

Nope but it's not September yet (that's when we usually get ours and consider us to be lucky that's it's always September of the same year 🙂 )

Pia

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Posted : June 19, 2011 1:05 am
freckley13
(@freckley13)
Advanced Member

Do you know how the interest works on refunds?

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Topic starter Posted : June 19, 2011 3:32 am
Jumbie
(@ohiojumbie-2)
Trusted Member

Do you know how the interest works on refunds?

Are you serious with this question??

Unless I am completely wrong, IRS in states and VIRB in Virgin Islands doesn't pay you interest on a tax refund. It's completely the other way around -- you pay them interest if you don't file on time / owe them money.By you having a refund on your income tax filing, you have in fact "given" them an interest free loan, so why do you expect them (IRS or VIRB) to pay you interest on your refund?

Jumbie -STX

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Posted : June 19, 2011 12:41 pm
STXBob
(@STXBob)
Trusted Member

Do you know how the interest works on refunds?

Are you serious with this question??

Unless I am completely wrong, IRS in states and VIRB in Virgin Islands doesn't pay you interest on a tax refund. It's completely the other way around -- you pay them interest if you don't file on time / owe them money.By you having a refund on your income tax filing, you have in fact "given" them an interest free loan, so why do you expect them (IRS or VIRB) to pay you interest on your refund?

Jumbie -STX

You're completely half-wrong. IRB pays interest on refunds if they don't pay you on a timely basis. I think the interest starts on June 1, but I don't know the interest rate. They have paid me interest on several refunds over the last few years.

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Posted : June 19, 2011 3:26 pm
Jumbie
(@ohiojumbie-2)
Trusted Member

Ok if you say so STXBob. Anyway that's totally insane. Since I always make sure I owe the VIRB money, I really don't have an axe to grind.

Jumbie -STX

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Posted : June 19, 2011 5:25 pm
freckley13
(@freckley13)
Advanced Member

Actually the IRB is the one who told me that interest would be included with the check they pay 12% for taxes paid after June 1st. I just didn't know if it accrued monthly or just one lump sum. So I know for a fact they pay interest just didn't know how it exactly worked

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Topic starter Posted : June 19, 2011 5:53 pm
Cruz
 Cruz
(@Cruz)
Advanced Member

interesting....

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Posted : June 19, 2011 6:29 pm
STXBob
(@STXBob)
Trusted Member

Are you sure the IRB pays 12% interest on refunds now? That sounds too good to be true.

I just looked at my refund info from TY 2008 (the last time I got a refund), and I calculated that they paid me about 5.6% interest.

The refund was $2,628 + $37.12 interest, paid on 8/31/2009 (91 days after 6/1/2009, so 91 days of interest).

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Posted : June 19, 2011 6:50 pm
freckley13
(@freckley13)
Advanced Member

This is a quote from an article in the VI daily news the was written just before june 1 of this year.

Watson-Anderson said she wants to ensure that all the refund checks are drawn, drafted and signed by June 1. Under V.I. Code, the Bureau of Internal Revenue must pay 12 percent interest on any refunds issued after that date, Watson-Anderson said.

Read more: http://virginislandsdailynews.com/news/irb-says-it-is-working-overtime-to-process-v-i-tax-refund-checks-1.1152553#ixzz1Ps5Cdvsz

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Topic starter Posted : June 21, 2011 1:52 am
freckley13
(@freckley13)
Advanced Member

What i get from that article is that 12% will be paid to any refund that is received after June 1, isnt that what you gather from this article?

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Topic starter Posted : June 21, 2011 1:54 am
STXBob
(@STXBob)
Trusted Member

What i get from that article is that 12% will be paid to any refund that is received after June 1, isnt that what you gather from this article?

It sure looks that way, but it's unrealisitcally high, so I suspect the article is wrong. Via Google, I see that 12% is what the VI charges late tax payers, but I doubt that it's also what they pay on refunds. I'll get my calculator out again when my 2010 refund check comes, and see what rate I got.

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Posted : June 21, 2011 2:34 am
Linda J
(@Linda_J)
Expert

"she wants to ensure that all the refund checks are drawn, drafted and signed by June 1. Under V.I. Code, the Bureau of Internal Revenue must pay 12 percent interest on any refunds issued after that date, Watson-Anderson said."

I don't think she is saying it has to be in your hands by 6/1/11, just that the government must have written the check by that time.

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Posted : June 21, 2011 9:30 am
mgpilot
(@mgpilot)
Advanced Member

So... They can date the check May 30th (when it's actually August 30th) and get away with it, right? 😉

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Posted : June 21, 2011 4:25 pm
freckley13
(@freckley13)
Advanced Member

Yea that's what I thought to but the last time I called to check the status of the return she said interest would be included! 🙂

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Topic starter Posted : June 22, 2011 12:26 am
East Ender
(@east-ender)
Expert

An article this morning in the Daily News says refunds by September...

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Posted : June 22, 2011 11:55 am
Jumbie
(@ohiojumbie-2)
Trusted Member

Not to contradict what anyone said on this thread concerning the amount of interest % paid, but here's some of what was on 970AM news this am.
1. Some tax refunds have been sent out but not all. Monies were budgeted but that doesn't mean all budgeted tax refund monies are available
at the same time.
2. All tax refunds should be sent out by Sept 1, 2011. The check date determines the day(s) late past 6/1/11.
3. Interest rate of 4% annual will be paid. So whatever refund you are due, multiply that refund by 4% for an annual interest number.
Divide your annual interest number by 360 (days) to determine the $ or cents per day of interest due you. Every day late after 6/1/11 is the
number you mulitply by to get your interest money. (example - $2000 refund - 90 days late --would mean $.222/day x 90days or $19.98
interest paid.
.
Jumbie -STX
.

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Posted : June 22, 2011 6:09 pm
Jumbie
(@ohiojumbie-2)
Trusted Member

In case some have not seen VI Daily News article of 6/22/11

Jumbie -STX

Government: All tax refunds will be paid by September
By ALDETH LEWIN (Daily News Staff)
Published: June 22, 2011

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ST. THOMAS - Many income tax refunds are late this year, but government officials promised they will all be paid out by September.

At a Senate Finance Committee hearing Tuesday, members of the governor's financial team assured senators that the government has budgeted the funds needed to pay 2010 tax refunds.

Finance Commissioner Angel Dawson Jr. said that $80.8 million was set aside to pay tax refunds in the Fiscal Year 2011 budget.

To date, about $26 million has been paid out in refunds, Dawson said.

Internal Revenue Bureau Director Claudette Watson-Anderson said 7,696 checks have been processed. She said the government typically issues about 33,000 refund checks each year.

Taxpayers who do not receive their refund within 45 days of filing accrue a 4 percent annual interest on their refund. To calculate the interest payments, IRB takes the refund amount and calculates 4 percent of that total. The 4 percent interest then is divided by 365 days. Each day after June 1 that the check is late, that portion of the interest is added to the refund.

The IRB sends schedules, or batches, of refunds to the V.I. Finance Department in groups of 500, Anderson said. Finance determines what money is available and issues the checks.

Refunds are dependent on the government's cash flow, Dawson said. The refund money is budgeted, but that does not mean a lump sum is sitting there for the taking. Dawson must wait for revenues to come in before he can issue checks, he said.

"This is not different from any other year," Dawson said.

He said he understands people get "antsy" around this time of year.

"We'll do our very best to get those schedules down and make those payments as soon as possible, as cash flow allows," Dawson said.

Anderson told senators that all refunds should be paid by September.

Read more: http://virginislandsdailynews.com/news/government-all-tax-refunds-will-be-paid-by-september-1.1165213#ixzz1Q5alv0Es

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Posted : June 23, 2011 9:22 am
freckley13
(@freckley13)
Advanced Member

I like how in the beginning of the article it says they will be paid by September and in the end they say they should be paid by then. Little faith for the IRB!!!!! it blows my mind that it takes this long to get money the government owes you, but I guarantee if you owed them money they would breathing down your neck til it was paid!

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Topic starter Posted : June 24, 2011 6:54 am
mminstx
(@mminstx)
Advanced Member

On St Croix, someone has hung a bedsheet on the fence across from Sion Farm gas station and written words in complaint on it about not receiving their tax refund. Can you imagine what the place would look like if we all hung a bed sheet? *-)

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Posted : June 25, 2011 11:20 am
STXBob
(@STXBob)
Trusted Member

Here's a new article that largely repeats the article that Jumbie posted from 6/22/11
http://virginislandsdailynews.com/news/finance-says-tax-refunds-will-be-paid-by-end-of-september-1.1186756

Finance says tax refunds will be paid by end of September

By ALDETH LEWIN (Daily News Staff)
Published: August 10, 2011

ST. THOMAS - V.I. Finance Commissioner Angel Dawson Jr. said Tuesday that all income tax refunds should be arriving in taxpayers mailboxes soon.

"We do intend to pay refunds by the end of September," Dawson said.

At a Senate Finance Committee meeting Tuesday, Dawson said the next batch of refunds, totalling $8 million, will be sent out this week. Including those refunds, the department has mailed out 14,605 refunds, which totals $49.8 million.

He said $80.8 million was set aside to pay tax refunds in the Fiscal Year 2011 budget.

"So we're well over half way there," he said.

Taxpayers who do not receive their refund within 45 days of filing accrue a 4 percent annual interest on their refund. To calculate the interest payments, the Internal Revenue Bureau takes the refund amount and calculates 4 percent of that total. The 4 percent interest then is divided by 365 days. Each day after June 1 that the check is late, that portion of the interest is added to the refund.

The Internal Revenue Bureau sends schedules, or batches, of refunds to the V.I. Finance Department in groups of 500. Finance determines what money is available and issues the checks.

Refunds are dependent on the government's cash flow, and as the money is available, the checks are issued, Dawson said.

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Posted : August 11, 2011 5:11 pm
Jumbie
(@ohiojumbie-2)
Trusted Member

I talked to somebody yesterday that is stil waiting on their tax refund from 2 yrs ago (2009 tax yr). Interest on that refund if they ever get their refund should be a nice tidy sum.

Jumbie-STX

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Posted : August 11, 2011 8:25 pm
Tippi
(@Tippi)
Trusted Member

Still waiting on our refund!

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Posted : August 12, 2011 1:51 pm
mgpilot
(@mgpilot)
Advanced Member

Forgot to post here that we got our refund a couple weeks ago (filed February 26th), and there WAS interest on it!

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Posted : August 13, 2011 9:26 pm
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