Solved
Our '09 taxes were audited, we were penalized and the money taken from subsequent refunds. After protracted fight, we were reimbursed last year. Is reimbursement taxable?
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No, a reimbursement of federal taxes is not taxable. However, any interest paid to you by the IRS is taxable. You should have received a Form 1099-INT if any interest was paid to you.
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