Taxes: A Kinder Collector

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Anyone who shortchanges Uncle Sam at tax time can expect that, with virtually the same certainty as death, a dunning notice will follow. But when someone overpays the IRS, the reaction is sometimes silence. Thanks to Linda Johnson, an IRS examiner in Memphis, that will soon change. She complained to her Senator, Democrat Albert Gore, that when taxpayers in certain categories failed to subtract already withheld sums in calculating what they owe the Treasury, the IRS simply pocketed their surplus payment without telling them. Urging superiors to change the rules so these people will get refunds, she argued, "It was stealing from the taxpayers."

Gore raised the injustice with IRS Acting Commissioner Michael J. Murphy, who agreed that the policy was wrong. Henceforth, he ruled, overly generous taxpayers will get refunds. The problem arises mainly for workers who retire or quit and get lump-sum pension payments but forget to claim a credit for the taxes that were withheld. Taxpayers who detect such an error as far back as 1985 can apply for repayment. The Government will even pony up interest on its unfair use of the citizens' money.