The interest rate that individuals will pay on underpayments remains at 3% for the first quarter of 2012. The interest rate that the IRS will pay on overpayments (tax refunds) will also be 3%. Most ordinary tax refunds do not earn interest. The IRS does not have to pay interest on tax refunds made within 45 days of the return
A tax technique for receiving a refund of back taxes by applying a deduction or credit from a current tax year to a prior tax year. For example, a business net operating loss may be carried back for two years.