Tax Repayments Sought for Bad Money Orders
The Internal Revenue Service is notifying some of Southern California’s poorest residents that they will have to come up with a duplicate tax payment--along with 10% interest penalty--to cover payments made with worthless money orders purchased from the now-defunct General Money Order Co.
The Los Angeles money order company, which sold an estimated 300,000 drafts worth $60 million in December, was seized by the California Department of Corporations after it was disclosed that the firm was unable to reimburse at least $3.16 million of its money orders.
The notices are being sent to an undetermined number of “mostly poor people who went to liquor stores or check cashiers” and purchased General Money orders to pay their taxes, said Judith Gold, an IRS spokeswoman in Laguna Niguel.
Gold said the IRS will not assess its customary 2% bad check penalty, but she said that since the worthless money orders cannot be honored, taxpayers will have to pay their taxes again plus the 10% late fee. They will have to file a separate claim with the state to get their money back from General Money Order Co.
To set up a payment plan, the IRS is asking that affected taxpayers go to the nearest IRS office or call 1 (800) 829-1040. In the Laguna Niguel District, which covers most of Southern California, customer service lobbies are located in Carson, El Centro, Laguna Niguel, Oceanside, Palm Springs, Riverside, San Diego and Santa Ana.
The Los Angeles district has offices in downtown Los Angeles, West Los Angeles, El Monte and Van Nuys.
The claims for money order reimbursements must be filed with state receiver David L. Ray at P.O. Box 1207, 1015 Gayley Ave., Suite 120, Los Angeles, Calif., 90024.
