IRS refund checks have never been part of my life, since I go to great lengths never to have too much tax withheld, or to have any withheld at all if I can help it. This is simple matter, in my case, of not wishing to loan the government money interest-free, but it turns out there's another good reason not to do it. It's fantastically easy for criminals to file electronic tax returns in your name and claim a fraudulent tax refund. The con man in the video
linked here found that about 40% of the dozens of returns he used to file every week would be paid within 7 days. When the real taxpayer later files a return seeking a refund, he finds that he will have to spend months standing in line and fighting with the IRS to prove his identity.
That makes three sound reasons not to over-withhold.
ReplyDeleteThe third reason is that, so far, the only means the government has for sanctioning you for not having a health coverage plan acceptable to it is to withhold its "fine" from your refund check.
Eric Hines
Although that supposedly is the case, the IRS is also apparently barred from actually sequestering refunds in another part of the legislation, if I read it correctly.
ReplyDeleteBut still, I never liked getting a refund, so I've fixed it so I owe something every year.