August 04, 2001|By Rob Kasper
THE "DEPENDENTS" are restless. The wage-earning offspring in our household recently received word that they were not eligible to receive the ballyhooed federal income tax rebate being issued this summer. They won't get the rebate because their parents claimed them as dependents on our 2000 federal tax form.
This was not welcome news. Opening up the Internal Revenue Service epistle bearing the bad tidings was like opening up a beautifully wrapped package and finding nothing inside. There were howls of protest. Expressions of rage were hurled at President Bush, who was mentioned in the letter; at the IRS, which sent it; and at the household's primary taxpayers, also known as Mom and Dad, who were held responsible for this dastardly deed.
The would-be rebate had been mentally spent and the "injustice" of not getting what was expected was almost too much to bear. It was "a gyp."
I didn't say anything to my fuming 20-year-old son as he stormed around the kitchen, letter in hand. But I thought, "Welcome to the real world."
Judging by what I have read and heard, the upset among dependents is common. The Sun's Eileen Ambrose reported last week that the Baltimore office of the Internal Revenue Service had been flooded with callers asking about rebates, including some from young adults unhappy with the news that they were not going to get a check from the government because someone claimed them as a dependent.
You have to meet several standards to claim someone as a dependent, according to Sam Serio, IRS spokesman in Baltimore. But the primary test, Serio said, is providing more than 50 percent of someone's financial support. To me that sounds like a short definition of "parent."
In casual conversations with fellow fathers, I have heard several stories about kids who were livid when they got letters telling them they were not getting a rebate because their parents had the audacity to claim them as dependents.
"It is all your fault," one Riderwood 23-year-old penned in a note to his mother, protesting the family's taxpaying arrangements. The message was written on the outside of the IRS missive that had carried the unhappy rebate news.
Like many youths, this one had a plan to change that news: namely, a 50-50 split of the parents' expected rebate of $600.
The Riderwood mother replied that she would be happy to share the rebate, provided her son was willing to employ a similar 50-50 spilt on expenses, including years of college tuition. The proposal to share expenses reportedly silenced any further protest over shared revenue.
Similarly, the college sophomore in our home was tantalized by the prospect, mentioned in the IRS letter, that he might get a rebate next year, when the 2001 taxes are filed, if we would stop claiming him as a dependent. I checked this point with Serio, who said that it was correct. But when the IRS spokesman described the ideal scenario for such a change in tax status - a kid graduates from college and lands a high-paying job - I knew this situation did not apply to us.
I tried to convince the kid of the righteousness of his father's ways by giving him the "big picture" argument. I told him that the $4,600 of deductions on both federal and state taxes that we got by claiming him as a dependent in 2000 translated into a bigger tax savings to the household than the mere $300 rebate he would have received.
The kid mounted a two-pronged rebuttal to this. First, he said, we approach economics from different points of view. While I think "long-term" and "big picture," people his age think fast money and what is playing at the movies tonight. The second part of his argument relied heavily on evoking parental guilt. Or, as he said, with a straight face, "Where's the love?"
From a public-policy point of view, I think the young folks have a point. If the purpose of the tax rebate is, as President Bush has frequently stated, to stimulate the national economy, then the under-30 age group is probably the one to send the checks to. Money seems to burn a hole in their pockets and they seem willing to quickly spend it on CDs, clothes and other "fun stuff." Meanwhile, when stick-in-the-muds like me contemplate getting an infusion of $600, we think stodgy, old-style thoughts like paying off credit card debt.
I guess the lessons from the great rebate debate are similar to those you learn when you open your first paycheck. Namely, that you never end up with as much money as you expected and that when it comes to taxes, old folks rule.
