If we as taxpayers are to be penalized for underpaying, shouldn't the government be penalized for over withholding. This penalty should come in the form of a sensible interest payment added onto to each and every tax refund.
This would have several benefits in addition to increasing government accountability. It would encourage taxpayers to have more withheld thereby helping them to save money. This in turn would provide the government extra funds through the year to use as needed; at the same time force them to be more responsible with the funds as it will have to return any excess, with interest. This interest payment would be calculated in such a way that is fair to the taxpayer while still being beneficial to the government.