Many tax rebates yet to be mailed

PERSONAL FINANCE

July 08, 2008|By EILEEN AMBROSE

Nearly 105 million down, another 19 million to go.

Those are the latest figures from the Treasury Department on the number of economic stimulus tax rebates issued so far.

More than $86 billion has been disbursed as of last week and another $24 billion will be issued.

So have you gotten yours? And if not, why not? That last question is not easy to answer, although plenty of people are still asking.

Maybe it's because you didn't file your tax return early enough or it was incomplete. Maybe your stimulus payment was applied to back taxes or child support. Or you may be among the millions who have yet to file a return, a necessity to collect a rebate.

The rebates are basically an advance on a one-time 2008 tax credit. The payments are up to $600 for individuals and $1,200 for couples. Parents with young children can receive an extra $300 per child.

The rebates have helped bolster the economy. But as public relations, they seem to have fallen flat.

Most of the calls and e-mail I receive about the rebates are from upset consumers. And they blame the IRS. They are angry that their payment didn't arrive on schedule. Some are upset that they - or their college-age children - don't qualify under the rules. Others are unhappy that their payment is being applied to back taxes they owe. And some are mad that they didn't qualify for more money.

Sure, the execution hasn't been perfect. But cut the IRS some slack.

After all, Congress initially sent out mixed signals about who would qualify for a rebate.

Then legislators added to the confusion by passing a complicated law. The IRS was left to carry it out during the tax agency's busiest time of the year.

The IRS started by sending 140 million letters in mid-March to inform taxpayers about the stimulus payment, IRS Commissioner Douglas Shulman told a congressional committee last month.

It worked with the Social Security Administration and Veterans Affairs to identify about 20 million retirees and disabled veterans who usually don't file a return because of low incomes. The IRS sent out a separate letter to them with information about filing a return.

And the IRS reviewed more than 38,000 duplicate returns for possible cases of identity theft, Shulman said.

The agency said it found only 25 potential cases of someone filing a return under another's Social Security number.

Some reasons

Of course, all this doesn't mean much if you're the one not getting your rebate when you expected.

Here are some reasons why that could be:

*Not filing early enough.

The IRS set up a schedule of when you should receive your payment based on the last two digits of your Social Security number. The last paper checks, for instance, are scheduled to be in the mail by Friday for those whose last two digits range from 88 to 99.

"The schedule was designed for tax returns that were processed by April 15," says Andrew DeSouza, a Treasury spokesman. Processing means the IRS got the return, entered the information into its system, checked to make sure the return was complete and verified the figures for a refund or taxes due. If you mailed in your return within the few days before April 15, as many do, your return likely wasn't processed by the deadline.

Also, if your return was incomplete or the IRS had a question about your return, processing was further delayed.

*Not filing at all.

The IRS recently announced that 5.2 million retirees and disabled veterans - including more than 97,000 Marylanders - haven't filed a return yet. It plans a campaign to reach these retirees and veterans later this summer. If that's you, you must file by Oct. 15 to receive your rebate this year.

"Do yourself a favor and file early," says Eric Smith, an IRS spokesman.

If you miss this deadline, the proposed 2008 tax form has a line for you to claim the rebate, Smith says. But that means waiting even longer for your money.

*Paper vs. direct deposit.

More than 20 million taxpayers took out refund anticipation loans or refund anticipation checks this year. If you were among them, you couldn't get your rebate directly deposited into your bank account and had to wait for a paper check. That delayed your rebate by 21/2 months.

*Child stimulus payments.

Nearly all the 36 million returns claiming extra stimulus payments because of young children had been correctly filled out, Shulman told Congress. But in some cases involving the child tax credit, filers failed to check a box on their tax form and didn't get their child stimulus payments, he said. The IRS is sending about 230,000 extra payments to parents early this month, he said.

Checking status

To check the status of your rebate online, go to www.irs.gov and search for "Where's My Stimulus Payment?"

Or, call the IRS toll-free at 866-234-2942 to get automated information on your rebate or to talk to an IRS staffer.

As you might imagine, the line is busy and you can spend a long time on hold waiting to talk to a real person. Avoid calling Mondays when phones are busiest, Smith advises. The best time to call is early in the morning or in the evening, he says. The phone lines are staffed 7 a.m. to 10 p.m. on weekdays.

To suggest a topic, contact Eileen Ambrose at 410-332-6984 or eileen.ambrose@baltsun.com.

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