Money For Nothing & Your Checks For Free: Is There Something More To Tax Rebates?

It sounds almost too good to be true, no? Just for filing a tax return, our government will hand over a check to you. It is, after all, merely a means of getting money into the hands of everyday Americans to stimulate the economy. Right?

I received an email over the weekend with one simple question, “Why do you have to file your 2007 tax return before you can receive a rebate check?”

My initial response was that it was the most simple method of determining eligibility. But then I thought about it a little bit longer. There are other ways of determining eligibility – and why not use the 2006 tax season? And just like that, my mind kicked into high Mel Gibson-Conspiracy Theory mode.

Is it possible that the filing requirement is actually meant to “encourage” more taxpayers to file?

Could it be that the lure of “free money” will be enough to encourage regular non-filers to file – and possibly pay?

Instead of raising taxes in an election year, could it be contemplated that filing incentives will actually raise revenues?


For the record, I don’t believe that Congress puts all that much thought into the best method to lure taxpayers into filing tax returns… But it is an interesting thought.

Here are some statistics to chew on:

  • Each year an estimated 9 million taxpayers who are required to file a federal income tax return fail to do so – the resulting undereported and unpaid tax is approximately $24.3 billion.
  • The federal tax gap, which is the difference between the amount of tax owed and the amount actually collected, is nearly $300 billion each year.
  • The Tax Foundation estimated that, of the 136 million tax returns filed in 2006, 43.4 million tax returns had a zero or negative tax liability.
  • 15 million households filed no tax return at all in 2006.
  • The Tax Foundation reports that the total of the nonfilers and those that paid nothing comprise 41% of the US population.
  • 20 million seniors are eligible for rebate checks this year. However, each year, 12 million seniors do not file tax returns.
  • Taxpayers who have an outstanding tax liability from prior years will not be eligible for a full refund.

    So what does any of that mean? Maybe nothing. Or maybe it means that there are a lot of taxpayers who normally either don’t have to file or willfully choose not to file – and this year, there’s an incentive to file and pay.

    Could it be an elaborate plot to see who is not filing? Is it a way of updating the records in the ol’ IRS database? Is it a strategy to have more on time payments in 2008? Is there something more to it than merely getting some free money?

    I don’t know. But I will say this: I’m already hearing flurries of “should I file this year?” No doubt, some of these are from folks who have willfully chosen not to file in years past and now see a big fat check being waved in front of their faces.

    The whole thing reminds me of the episode of the Simpsons (Lisa the Skeptic) where the police lure Homer to the station to arrest him for 235 unpaid parking tickets.

    Chief Wiggum has Homer arrested and says: I hope you brought your checkbook, wiseguy.
    Homer replies: You lousy cops. Lucky for you, I’m double-parked, or I’d… (writes a check)
    Homer continues: There. Now, could I please have my motorboat?

    Are the rebate checks the equivalent of Homer’s motorboat?

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    18 thoughts on “Money For Nothing & Your Checks For Free: Is There Something More To Tax Rebates?

    1. I’m not a fan of the stimulus package as it is. I’ve always believed there was more to it then what appeared on the surface. Methinks many people will end up paying for the ‘use’ of this ‘gift’ in a way that’s much more costly then it would have been without. Great post!

    2. Awesome theory, Kelly. At the very least
      I’m inclined to think there’s more going on than meets the eye.

      Regardless, it’s a sad state of affairs when the government gives us money so we can give it to businesses. Where’s that money coming from, anyway?

    3. I applaud this entry. It certainly seems that in a time of war when the deficit is at an all time high is not in the best interest of the country. I almost feel pandered to. I mean really…do you think I can be ‘bought’ for a few hundred dollars? Do they really think that I’m going to turn around and spend that money and not save it for the ‘rainy day’ that is sure to come during this recession? Give me a break!

    4. I haven’t paid filed since 1999 and I will NOT file just to receive your money in the mail. I pay so many taxes and get nothing in return it makes me sick. I pay for your kids to go the school. I pay for WICK, Food Stamps, Welfare, Social Security, and many others NONE of which I am eligible for, yet I still PAY!!!!

      Congress has stated that there is NO LAW that requires me, YOU, or ANY other American to file or pay “Income Taxes”; so why do you still pay it???? Are you that afraid of the IRS that even after you read the truth you still coward down to them???

      Mark Twain
      “In the Beginning of a change, the patriot is a scarce man, and brave and hated and scorned. When his cause succeeds the timid join him, for then it costs nothing to be a patriot.”

      Edward Abbey
      “A patriot must always be ready to defend his country against his government.”

      Congressman John E. Ensign–
      “I cannot point to a specific place in the law where it says you must pay income taxes.”

      Congressman Dan Burton—
      “You are correct in your assertion that the word “liability” or terminology “liability for income taxes” is not contained in any Section of the Internal Revenue Code”

      Grace Commission
      “100% of what is collected is absorbed solely by interest on the Federal Debt… all individual income tax revenues are gone before one nickel is spent on the services taxpayers expect from government.”
      Report submitted to President Ronald Reagan in 1984

      Aaron Russo: “Is there a law that requires people to file a 1040?”
      Congressman Ron Paul: “Not explicitly, but it’s certainly implied.”
      Aaron Russo: “Well implied by force; but is there a law?”
      Congressman Ron Paul: “I cannot cite a law, no, I cannot….you know if they think it’s a law and they have all the guns; you know it’s an authoritarian approach.” {Taken from the movie “America: Freedom to Fascism”}

      President Ronald Reagan, May 1983, Williamsburg, VA
      “Our federal tax system is, in short, utterly impossible, utterly unjust and completely counterproductive [it] reeks with injustice and is fundamentally un-American… it has earned a rebellion and it’s time we rebelled.”

    5. Mike,
      I love that you think you get nothing in return.
      Who built the roads that you drive on? Who pays for the military to protect our country? Who pays for the research that brings us medical treatments? Who pays for the police? For firefighters? Air traffic controllers? Coast Guard? Museums? Parks?
      Every time that you eat or drink food or beverage that has been deemed safe, every time that you take a sip of water that has been verified as clean (unlike in 3rd world countries), every time you get in your car, every time you use public transit, every time that you turn on electricity, you are benefiting from tax dollars. Even if you make your own food, clothes, etc., you are relying on federal regulations or products on some level.
      It’s impossible to effectively argue that you get nothing.

    6. In fact the gas tax pays for the roads, I do not and cannot use public transportation, our military is being exploited and used in foreign nations, NOT in America, I haven’t flown on a plane since 1986 and if I did my ticked would pay for the air-traffic controllers, my state and local taxes that I do pay, pays for the parks I visit as well as the police, fire and rescue. I am an Electrician and when I pay my electric bill it includes Federal State and Local Taxes that you think are collected from Income taxes. I pay ALL taxes the LAW requires me to and still rarely receive any benefit from them.

      I have no children, am not on welfare and do not qualify for it either, I get no food stamps, or benefits from the welfare or social security systems!!!

      NOT one penny of our “Income Tax” money goes to the goods and services you think they do!
      I cite “The Grace Commission”!

      I love the fact that you and the us government steal money from people instead of just telling them the TRUTH!!!

      26 USC 5005 Persons liable for tax.
      (a) General.
      The distiller or importer of distilled spirits shall be liable for the taxes imposed by section 5001(a)(1)

      26 USC 5703 Liability for tax and method of payment.
      (a) Liability for tax.
      (1) Original liability.
      The manufacturer or importer of tobacco products and cigarette papers and tubes shall be liable for the taxes imposed by section 5701.

      26 USC 4401 Imposition of tax.
      (c) Persons liable for tax
      Each person who is engaging in the business of accepting wagers shall be liable for and pay the tax under this subchapter on all wagers placed with him.

      Congressman John E. Ensign–
      “I cannot point to a specific place in the law where it says you must pay income taxes.”

      Congressman Dan Burton—
      “You are correct in your assertion that the word “liability” or terminology “liability for income taxes” is not contained in any Section of the Internal Revenue Code”

      Grace Commission
      “100% of what is collected is absorbed solely by interest on the Federal Debt… all individual income tax revenues are gone before one nickel is spent on the services taxpayers expect from government.”
      Report submitted to President Ronald Reagan in 1984

    7. You’re wrong about a great deal here.
      The federal gas tax (18.4 cents per gallon) supplements the FHwA but is not the sole source of support for roads, bridges and other infrastructure. That money comes from the general fund (aka tax dollars).
      Our military does do a lot to keep us safe at home – my brothers are Navy and I can attest to that – including helping out with natural disasters such as Katrina. It’s easy to say “I don’t need them” until you do.
      Federal tax dollars fund state and local coffers – you can believe until you’re blue in the face that they don’t.
      And you and I have discussed this before, I don’t mind a good dialogue – and I encourage it – but please don’t post the same thing over and over. It looks spammy. You’re free to add something to new to the conversation over and over. But if you keep posting the same code sections and quotes without adding anything to the conversation, I’m going to have to cut you off. Lots of folks disagree with the Tax Code, the IRS and tax pros (including me) – and I don’t have a problem with that, I like it because it gives me new perspective. But pounding away at the same tired quotes is not new perspective.

    8. My brother and I used our money to help my parents, one sister, and many other Citizens of New Orleans and Mississippi, after Katrina because our government was doing nothing.

      Watching people die in the streets and the Police and National Guard do nothing made me sick; so “We the People” did something about it!!! Did you???? Did you go there and help????? Did you send money to help????? I have the pictures to prove what I say, do you????

      I also have family in the military (in Iraq) and that is the problem they DO NOTHING here at home except train to fight foreign wars that have NEVER been declared by the US Congress and thus are “ILLEGAL” and “UNCONSTITUTIONAL” in nature.

      If our military was here in America we would not need to build a border fence because the National Guard COULD do the job without a fence.

      The “General Fund” comes from sales tax, import/export taxes, property taxes and such. All of which I pay because the law says I must.

      Have you ever told any of your clients the truth about income taxes???????????

      Have you ever cited the law that establishes “Liability” for income taxes, as do sections 5005, 5703, and 4401 for their respective taxes?????

      I must attack where it is appropriate, as so called “Tax attorneys” “CPA’s” “Federal Judges” and the“Tax Court” (which is NOT even a court of law) are ALL part of the fraud that is our tax system; if this includes you then so be it!

    9. P.S.
      Cut me off if you wish.

      It only means that I speak too much truth and it hits too close to home for you.

      “The truth often hurts; but is always the truth”– TaxMan Mike–

    10. I do NOT spam anyone or anywhere.

      I only wish to help America, and help educate good hearted Americans about the fraud that is the Income Tax system, the IRS and the Federal Reserve.

      If I repost things it is because people need to read it over and over again before it will sink in. “We the People” including you Kelly, have been lied to since we were born.

      Everything you were taught in school about the Government and the income tax was ALL lies. There is NO LAW that requires “US” to file or pay ANY “Income Tax” and that is the TRUTH!!!!

      I apologize if it seems like I was attacking you personally; it was not intended. I only intend on telling America the truth!!!!

      If you are caught up in the fraud that is the income tax, the IRS, and the Federal Reserve; then it is up to you to remedy that position! If you have a hard time sleeping at night because of your position, then only you can fix that. If however you have no problem sleeping and are a part of the fraud; then you have no morals and are stealing your clients money like I said!!!

      As I have stated this is not meant to be personal just truthful!

    11. P.S. I noticed you still have failed to simply cite the section of the Internal Revenue Code that establishes “Liability” for “Income taxes” as do sections 4401, 5005, and 5703, for their taxes respectively! As the IRS and the US Government cannot do either!!!! Because it does NOT exist! If it did exist, it would be as simple to cite as the three sections I have cited over and over again.

    12. Strange! I wrote an eerily similar article earlier this month [in my link], and I just stumbled on this article today. Strange how the world works eh?

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