California Tax Refund IOUs

Jonathan (over at MyMoneyBlog.com) has posted a picture of his California tax refund IOU.

I had heard that California was unable to pay its citizens their tax refunds, but I had not seen an actual copy of the IOU.

Can you imagine a scenario where …

  • You overpaid your taxes …
  • You filed your tax return on time …
  • Your state says, "OOPS!  We spent all of that, you can't have it back for at least six months!"?

Let's see how this would work in reverse where you underpaid your taxes and you owe money to the state …

  • You underpaid your taxes …
  • You filed your tax return on time …
  • You sent the state an IOU saying, "OOPS!  I spent all of tha, you can't have it for at least six months!"

I do see that California is paying 3.75% interest which should allow the certificates to keep up with inflation.  I wonder if the interest is taxable?

Yet another reason to NOT overpay taxes.

Read recent posts

Wow. It's Quiet Here...

Be the first to start the conversation!

Leave a Reply:

Gravatar Image