I Received This Letter From the IRS...My Bonds Have Matured!

Some people may have recently received information about their US Government Bonds. They have little time to prepare for what they owe, so we thought we’d brief all PRO-TAX Customers and other readers of these pages.

Especially if you or a client has received a letter from IRS addressed to “Savings Bond Owners” this might be very important.

Treasury Securities that have Stopped Earning Interest

Are there savings bonds that have matured and stopped earning interest? If so, it's time to cash them in, or have the money start working again by reinvesting it!  It may also be time to report the interest to the IRS!

It's important to check your savings bonds periodically to determine if they're still earning interest, and if they're not, they should be redeemed.

Use the tables below to determine whether your bonds have stopped earning interest, or for how long you can expect them to earn interest.

You can also check Treasury Hunt, if you're not sure whether you own any bonds that have matured.

”Well, Grandma gave me an old “E” bond.  What do I do with that now?”

IRS laws require bond owners to report the interest earned on a government bond under two circumstances:  first, in the year that the bond matures, OR the year the bond is redeemed, whichever comes first.

“What to do?”

Take the bond(s) to a local bank or credit union that offers redemption service.

The tax obligation is interesting. The bank will calculate and pay you the face value of the bond, plus all the interest earned since the bond was purchased.  That institution will issue a 1099-INT which also goes to the IRS.

Be sure to hold on to this document because you’ll need to give it to your PRO-TAX preparer when you’re ready for your 2011 tax preparation.

“But where can I find the value of my bond?”

There is a “calculator” conveniently located on the Internet at www.treasurydirect.gov .

Questions back at you:

Do you…

• Or a deceased loved one own a savings bond, or registered Treasury note or bond that has matured and is no longer earning interest?
• Have HH/H interest that you haven't received?
• Have Legacy Treasury Direct payments that you haven’t received?

You most likely will benefit by going to Treasury Hunt, which does not contain a record of all savings bonds but provides information on Series E bonds issued in 1974 and after.

Treasury Hunt may not completely identify any/all savings bonds you may have lost... only those that have reached final, which maturity and were issued in 1974 and after. You can’t search for undeliverable bonds in Treasury Hunt.

To file a claim for bonds, you must submit one of the following:

For lost, stolen or destroyed bonds, submit Form PD F 1048.

For undeliverable bonds (bonds not received), submit Form PD F 3062-4.

You will need to provide information about dates of purchase, names on bonds, and other pertinent data.

In any event, we suggest you contact your professional PRO-TAX preparer who will be glad to lead you through all the myriad trails you now need to follow.  You will find experts there with the necessary skills to help! Call us at 1-800-809-2829, or Click here  for a guide to our locations.

• More Articles