It appears that the IRS lied, or at the very least misled us. They originally said, or strongly implied, that all those who filed their 2007 federal income tax return by the April 15th deadline would receive a check in the first mailing. The clients who are still awaiting their promised checks all had a balance due to Sam on their 1040, so they, appropriately so, waited till the last minute to mail out their tax return and payment (I always tell my clients – “Let ‘Sam’ wait for his money”). The IRS now says that the first mailing is only to individuals whose 1040 was processed by the IRS by April 15th.
Yesterday a TAXWATCH article by Andrea Coombes at MarketWatch.com reports “Stimulating Confusion: As Millions of Taxpayers Await Checks, Others Find Themselves With Two”.
The IRS is quoted in the article as advising - "If a taxpayer receives more than one stimulus payment the erroneous additional payment should be returned to the IRS". The IRS further advises “If the erroneous payment was a paper check, write ‘void’ in the endorsement section on the back of the check, and attach a note that says you are returning an ‘erroneous stimulus payment check’”. Mail the check and the note to the IRS center where you filed your tax return
Actually for some individuals (I don’t use the word taxpayer, because you don’t have to actually have paid any federal income tax to be entitled to a rebate) who receive a second “stimulus” check the payment will not be a mistake. The IRS says it will be mailing out about 350,000 additional checks in July to recipients whose original “stimulus” payment did not include the $300 per eligible child.
Speaking of the “stimulus” rebate, TAX GIRL Kelly Phillips Erb reports in her post “Rebates Push Deficit to Record Highs” that “The economic stimulus payments - which qualify more or less as “free money” from the government - pushed the federal budget deficit to an all-time high of $165.9 billion in May.” This should not come as a surprise.
Considering all the confusion and costs involved with these “stimulus” rebates it is only natural that, as Jim of BLUEPRINT FOR FINANCIAL PROSPERITY points out in his post “Second Economic Stimulus Check: Obama’s Economic Plan", presumptive Democratic Presidential candidate Barack Obama called for Congress to send out another round of such checks in a speech at the North Carolina State Fairgrounds. .
To quote the lyrics of a popular folk song from my high school and college activist days – “When will they ever learn? When will they ever learn?”
FYI – Today's posting at ASK THE TAX PRO deals with taxpayers who file a separate return.