Despite the billions of dollars (with a b) which are suddenly floating around our economy, courtesy of the federal government in the form of a stimulus packge, June retail industry sales didn’t move much at all.
The National Retail Federation reported that retail sales last month edged up 0.2% over May. Retail sales figures do not include sales of automobiles, or gas station and restaurant receipts. If you take those excluded sources into consideration, the U.S. Commerce Department reported that retail sales actually decreased 0.1% from May to June.
It’s pretty grim news all around. The chief economist for the NRF commented, “As retailers enter the back-to-school season, they will have to be creative in finding ways to get consumers to spend on discretionary items.”
Oh boy, I sure hope so. I have three kids to buy back-to-school items for…
Who really benefitted from the economic stimulus plan?
Tax professionals for sure.
H&R Block, the nation’s largest tax preparer service, reported a banner quarter. The company prepared taxes for over 23.5 million clients – due largely to the rush for rebate checks.
This means that H&R Block posted a profit this quarter, which was good news for investors. Profits from the company were up more than $625 million for the same period last year.
So, at least someone is happy about the stimulus plan…
(Hat Tip: Talk Stock Trading)
Surprise! Having a “free check” for folks by requiring them to file when they don’t normally have to file isn’t quite as simple as you’d think.
The IRS has announced that more than 25% of eligible seniors have not filed tax returns for 2007. This means that those seniors will not receive a rebate check
So yes, the IRS is going to spend more money sending out another mailing to advise seniors to file. Nice, huh?
Yes, I sound a little bitter. It’s not that I don’t want folks to get their checks. It’s because this economic stimulus package has been a disaster from start to finish – full of mixed messages, IRS mistakes and misinformation from the administration.
And now, we get the price tag. In addition to the $168 billion in “free money” being mailed to taxpayers (which will clearly be made up in later years), the costs of administering the economic stimulus package may reach close to a billion dollars.
IRS initially received $202 million to carry out the economic stimulus legislation – the cost, as mentioned before, of all of the ads in the Super Bowl.
The Social Security Administration received a supplemental of $31 million and Financial Management Service (which manages the Offset Program) received $64 million.
Add that to the reallocation of hundreds of IRS collections staff to answering taxpayer telephone calls – estimated by the IRS to be $565 million in foregone enforcement revenue. These costs are in addition to the significant reduction in IRS’s telephone service, which has been overwhelmed (by a factor of 6) by calls about rebate checks – the costs of the resulting reallocations have not yet been reported.
Add in more “publicity” for the programs as noted above – the initial (non-targeted) mailings cost $42 million. And the costs keeps rising.
I’ll tell you what’s being stimulated – clearly disguised government pork.
Taxpayer asks:
Is there a remedy for a lost stimulus check?
Taxgirl says:
Are you sure that it’s lost? Or just not processed yet?
I would call the toll-free Rebate Hotline at 1-866-234-2942 and ask the IRS. You can also visit your local Taxpayer Assistance Center.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
Have a question? Ask the taxgirl!
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