[Congressional Record Volume 151, Number 13 (Wednesday, February 9, 2005)]
[Extensions of Remarks]
[Pages E198-E199]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 THE ERRONEOUS TAX REFUND FAIRNESS ACT

                          HON. LORETTA SANCHEZ

                             of california

                    in the house of representatives

                      Wednesday, February 9, 2005

  Ms. LORETTA SANCHEZ of California. Mr. Speaker, I rise today to 
introduce the Erroneous Tax Refund Fairness Act, a bill to ensure the 
fair treatment of tax payers who return overpaid tax refunds and are 
penalized for it.
  The deadline for filing tax returns will be here before you know it. 
Most Americans receive a refund, and our constituents enjoy getting 
back the money they earned from the IRS. However, even the IRS can make 
mistakes and occasionally people receive more money than they should. 
Those who have filed misleading information on their tax returns should 
be punished for their actions. But did you know that if a person is 
mistakenly overpaid and attempts to return the excess payment to the 
IRS, they must pay accrued interest on the amount of the erroneous 
refund?
  The legislation I am introducing today would abate the interest on 
erroneous tax refunds if the person receiving the refund made a good-
faith effort in a timely manner to return the money to the IRS. The 
bill also includes language that gives the Secretary of the Treasury 
discretion over whether or not to abate the interest. If the Secretary 
establishes that the

[[Page E199]]

taxpayer received notice of the erroneous notice before the date of 
demand and did not attempt to resolve the issue with the Internal 
Revenue Service within 30 days, the Secretary can determine what amount 
of the interest, if any, will be abated.
  This bill language was included in H.R. 1528 last year, which passed 
both the House and Senate, but was not signed into law. I hope that 
Congress will remedy the situation this year. We should punish those 
who cheat on their taxes, not those who make an effort to return money 
they mistakenly received.

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