A taxpayer may request that an overpayment (refund) of taxes be credited to a subsequent tax period liability instead of taking payment by check.If this is done,
A)The interest runs from the date of the overpayment to the due date of the amount against which the credit is taken.
B)No interest is accrued.
C)The interest runs from the date of the overpayment but at substantially lower than the Federal short-term rate.
D)The interest is put into a special reserve account that the taxpayer can withdraw at any time.
E)None of the above

Question

Quizplus · Accepted Answer

If a taxpayer requests that an overpayment of taxes be credited to a subsequent tax period liability instead of taking payment by check, the interest will run from the date of the overpayment to the due date of the amount against which the credit is taken. This ensures that the taxpayer does not lose out on any potential interest they would have earned if they had received a refund and deposited it into their own account.

A Taxpayer May Request That an Overpayment (Refund) of Taxes