Just chiming in to say I think it's stupid that the interest is taxable. If it weren't for the fact that the IRS had your money for too long, there are lots of things you could have done with it that would not have been taxable: earlier IRA contributions, increased 401(k) contributions, paying extra on your mortgage, buying government bonds, paying off a loan.
It's nice that the IRS acknowledges the time-value of money and includes an interest payment for delayed refunds, but to the extend that interest is accounting for inflation, even stocking up on canned goods would have provided you with inflation protection in an untaxable interest way.