This is mostly a rant - received 1099 from IRS understating interest they paid us in 2025

[engineernerd]

We received three payments from the IRS in 2025, the first two stated dollar amounts that were supposedly interest, the last was a direct deposit in an amount $41.35 higher than expected so I think that must be interest.

The number on the 1099 we received from them is lower by a random amount I can't make sense of. It's not like they forgot one of the payments or mistakenly assigned it to the wrong tax year.

In case anyone is curious, the three numbers are $342.27, $12.49, and (presumably) $41.35, totalling $396.11. The 1099 says $226.79. Eh

 

[Al18]

Call the IRS

 

[Koolau]

Call the IRS

Yes. If you want a real rant-subject for a future post - do call the IRS.

I think I'd just use what the IRS sent and fugdiddabouddit. Maybe they'll correct it some day. Maybe they won't. If they ever come back and try to blame you, tell 'em "Hey, you guys are the ones who sent the 1099 and I trusted you."

 

[MichaelB]

I think I'd just use what the IRS sent and fugdiddabouddit.

Yup.

 

[SecondCor521]

We received three payments from the IRS in 2025, the first two stated dollar amounts that were supposedly interest, the last was a direct deposit in an amount $41.35 higher than expected so I think that must be interest.

The number on the 1099 we received from them is lower by a random amount I can't make sense of. It's not like they forgot one of the payments or mistakenly assigned it to the wrong tax year.

In case anyone is curious, the three numbers are $342.27, $12.49, and (presumably) $41.35, totalling $396.11. The 1099 says $226.79. Eh

You can cross check with your IRS transcript if you're curious and want to try to figure it out that way.

My guess would be that some of the payments from the IRS are refunds and not interest. I'd also guess that you amended your 2024 or earlier return a time or two.

 

[engineernerd]

You can cross check with your IRS transcript if you're curious and want to try to figure it out that way.

My guess would be that some of the payments from the IRS are refunds and not interest. I'd also guess that you amended your 2024 or earlier return a time or two.

Thanks, I will look at the relevant transcripts before doing our taxes. If that doesn't explain everything, I might just use the larger number to make sure they can't legally charge a penalty.

And no, we did not amend our 2024 taxes, but the IRS did. Incorrectly.

 

[Badger]

Call the IRS

I have been doing that coming up to 3 years over an amended return with no results. Each time I call it is the same answer that it has been received and waiting to be processed. I don't think I will ever see that money. I have been doing quarterly payments for about 5 years now and will always make sure I pay a little less than what I owe. I don't trust the IRS to send back an overpayment.

 

[COcheesehead]

Why does the IRS pay interest?

 

[cathy63]

Why does the IRS pay interest?

Because the law says they have to in some circumstances. It's most common if you submit your tax return by Apr 15 but it takes them until after May 30 to finish paying out your refund.

 

[COcheesehead]

So when people talk about a refund being an interest free loan to the government, that’s not necessary true.

 

[cathy63]

So when people talk about a refund being an interest free loan to the government, that’s not necessary true.

Well, they don't pay interest on the vast majority of refunds, and when they do it's not for the entire time they had use of the funds, so most people who get refunds are indeed giving the government an interest free loan.

 

[dickoncapecod]

Shhhhh.... Do you really want to fight with IRS to increase your tax liability?

 

[sscharf]

Audit them, then fine them.

 

[db4759648]

So when people talk about a refund being an interest free loan to the government, that’s not necessary true.

You overpay during the entire year. When does the IRS start calculating what they owe you? I bet it’s a different time period.

 

[COcheesehead]

You overpay during the entire year.

No, you just have to overpay.

 

[Drake3287]

Apparently none of you guys recommending to call the IRS have ever done it! Literally the worse place to seek help from assuming you even reach a live person.

 

[Koolau]

Apparently none of you guys recommending to call the IRS have ever done it! Literally the worse place to seek help from assuming you even reach a live person.

Yeah, the "killer" is that no matter what they tell you - they don't have to stand behind it. If they are wrong - you still pay. Good gig if you can get it!