Why the IRS sent it
When a refund is paid late the IRS owes interest under IRC 6611, and interest of $10 or more in a year is reported on Form 1099-INT like any other interest. The interest is taxable income; the refund itself is not. Businesses see it after an amended return, a carryback, or a Form 945 or 941 overpayment that took months to process; individuals saw a wave of them in the years the IRS ran behind on paper returns.
Who the payer is
The payer name on the form is the Internal Revenue Service and the payer TIN is an EIN that does not belong to any taxpayer. The unpostable manual describes it in one sentence: the Detroit Computing Center holds an EIN "for the sole purpose of providing the 'Payer' EIN on Form 1099-INT statements issued by IRS to taxpayers who have received interest on their federal refunds. The Detroit Computing Center is not a 'true' taxpayer account entity" (IRM 3.12.279.15.1 Note, June 27, 2024). The number itself is redacted in the public manual. Two practical consequences:
- You cannot verify it. It will not appear in an EIN lookup service, it has no CP 575 behind it, and IRS TIN Matching is for payees you pay, not payers who pay you. Do not try to "validate" it and do not treat a failed lookup as a sign the form is fake.
- You do not report it back to the IRS on anything. A business does not issue a 1099 to the IRS, does not add it to a vendor master, and does not backup withhold on it.
Where it goes on the return
An individual reports it as interest income on Schedule B (or directly on Form 1040 if under the Schedule B threshold). A corporation reports it as interest income on Form 1120 line 5; a trust on Form 1041 line 1; a partnership or S corporation as portfolio interest passed through on Schedule K. The BMF underreporter program matches the IRS's own 1099-INT against those lines like any other payer's (IRM 4.119.4.7.11), so leaving it off a corporate return produces a Letter 2531 or 2030 for the amount, however small.
Is it real?
The form arrives by mail in January or February, shows only interest (box 1), no withholding, and an amount that matches the interest line on the refund notice (CP 21, CP 22 or the "interest" line of the refund itself). Anything that asks you to call a number, pay a fee, confirm your bank account, or "claim" the interest is not from the IRS. A copy of the form can be confirmed against your IRS online account transcript, where refund interest posts as a transaction code 776.