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.
I know this sounds stupid, but if the government can identify these folks, why don’t they just send them a check? I guess the enabling legislation required a filed return before a check was issued — apparently the “experts” didn’t think this one through. Seriously, wouldn’t it have been cheaper in the long run to just send them all a check? I hate to keep using the term “stupid,” but nothing more appropriate comes to mind!
Right again – taxgirl!
TexasEd,
I agree. There are a number of ways to have made this more efficient – why not base it on 2006 filings, for example, since the rebate was approved in winter (before tax season 07)?
I still believe that this is a major compliance motive here (to make people file).
Why send us a check at all? Why didn’t they just give us a tax credit when we filed our ’07 return? That would have cost the IRS essentially nothing, and would have gotten the “money” into our hands on April 15th, instead of making us watch the mailbox like a hawk as the checks trickle in over the next few months. George W. Bush has had a lot of stupid ideas since he took office, but this one (which, just to be fair, he stole from George McGovern, who wanted to send every citizen a check for $1,000) takes the cake.
Urb
Urbie,
You’re right but where would the photo opp be without a big cardboard check to stand beside? Tax credits just aren’t as exciting.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.
Can the “rebate” be taken as a tax credit if one has extended their 2007 filing date? I heard this characterized as a “tax credit in advance” which implies that one can.