Strains on the I.R.S. Could Delay Rebate Checks for Months

[maddezmom]

Source: NYTimes

By DAVID CAY JOHNSTON
Published: January 25, 2008

The checks will be in the mail — eventually.

But President Bush’s plan to send payments to 117 million households to stimulate the economy would impose major strains on the Internal Revenue Service, delays in answering calls to the agency and require a host of technical rules to determine who ultimately collects the benefits, officials said Thursday.

The deal between the administration and House leaders calls for checks to be issued 60 days after the president signs a law authorizing the one-time payments. That may be in as few as four or five weeks if the full House and the Senate come to terms on the details quickly.

In theory, the first checks may arrive in early May, if nothing goes wrong.

Even as the negotiators crunched the numbers, the Congressional Joint Committee on Taxation warned that the tax-filing season could be disrupted and hinted that it might be June before checks were issued.



Read more: http://www.nytimes.com/2008/01/25/washington/25irs.html?ref=washington

[flashl]

1. No more monopoly money?

Congress outsourced IRS's collection activities, I bet the predators they are unleashing onto the public are not having 'delays'.

[fasttense]

2. Maybe the IRS should hire more people?

Oh wait we can't create more jobs. That wont help the economy.

[lonestarnot]

5. Nah that would be job creation, and that's not done by bushitlers.

[EFerrari]

3. There was an economist from a lefty think tank on WJ yesterday.

He said June because they have to process all those tax returns first.

[Voltaire99]

4. Oooooooh Nooooooo! McBaby wants to shop at WalMart nooowwwwwwww!

There is no joy in McMudville tonight.

The McMansions keen toward the heavens with a mighty groan, and over the darkened subdivsion comes this strangled cry:

"But I need more shit I can't afford, like, yesterday!"

[tanyev]

6. Not to worry.

There will be plenty of companies out there willing to front people a lesser amount of cash now, in exchange for the full amount of their rebate check later. Shopping must not be postponed!!!!!

[flashl]

7. Just hear car dealer adv on radio ...

'No cash, no credit, bad debts, bankruptcy?' come on in, we'll process your tax return and have you in a car today!

[joeglow3]

8. For those who don't understand the rebate

I notice some people saying you had to "pay back" the last rebate. Others have asked what to expect. Still others ask if it is taxed.

Well, the previous rebate was not paid back, per se. Rather, as part of the original tax cuts, the lowest tax bracket decreased by an amount that resulted in $300 less taxes for individuals and $600 less taxes for couples. What the government was delay the implementation of THAT change for 1 year and, instead, issued the rebate checks. Thus, you really got your tax cut, but early.

Now, my understanding is that this rebate is to be considered a reduction to the lowest tax bracket for the $300/600/1200 you would be getting as an individual or couple. The $300 per kid is really an expansion of the child tax credit. Thus, none of this is taxable (it is not income, but really the government taking less of your already taxed income).

Now here is a issue I have not yet figured out: The child tax credit is a refunable credit, meaning if you do not owe taxes equal to or greater than the credit you are eligible for, you simply get refunded the amount of the credit over your taxes. Thus, everyone would get to keep their $300 per kid. However, if you do not pay taxes (i.e you do not benefit from the cut in the lowest bracket), are you affected??? I am guessing that you are not.

Thus, for those concerned:

1. It is NOT taxable.
2. I have not seen a chart showing where you fall for your $300/$600 (for single) or $600/$1,200 (for couples) based on income.
3. It is NOT something that is "paid back." If you make sufficient income, it is really a tax cut for next year, that has been accelerated to today. Thus, your tax return next year will be filed as if nothing changed, as you will receive the benefit of the check this summer. If you don't have sufficient income, you just get to keep the money.

I hope this clears some things up (I have not seen all the details yet).