US Taxpayers Flood IRS With Tax Rebate Calls

by Leroy Baker, Tax-News.com, New York

27 July 2001

The number of calls being received by the Internal Revenue Service regarding the forthcoming tax rebates is almost equivalent to the levels in the week before the April tax deadline, it revealed recently. By now, the majority of US citizens will have received the white envelope telling them whether they are eligable for a slice of Dubya's tax rebate, and if so, how big a slice. However, according to the IRS, the number one reason Americans are contacting them is to find out why they won't be getting a rebate, or why the amount is smaller than they had expected.

Many people assume that if taxes are witheld from their paycheck, then they will be due a rebate. However, if filers have already received a refund of their witheld taxes, or have taken large deductions or credits that wiped out their tax bills, then they can kiss that $300 check goodbye. Likewise those with incorrect information on their tax forms, those named as dependent on someone else's tax return last year, and those who owe back taxes or child support.

The second most frequently asked question is why rebates will be smaller than the publicised going rate of $300 for singles, $500 for heads of households, and $600 for married couples. Well, the answer to that is simple (although arguably less well publicised). A filer's rebate is based on whichever is smallest: total tax liablity, 5% of taxable income, or the maximum rebate for their filing status. So now you know.

You'd think having your name attatched to a wad of cash was a good thing, or at least couldn't do any harm, wouldn't you? But according to reports, many of those who are receiving rebates are distrustful of both the President's motives and the source of the money, and are choosing to donate or save the cash, rather than spending it on stimulating economic growth as Bush expected. The problem, say experts, is that the rebates are structured in such a way that they are not going to those who need them most, and are more likely to spend them, but are going to the already well off, who are more likely to save.

The numbers using the rebate checks as an opportunity for political protest are on the rise as well. According to AlterNet.org, which recently honoured Bush with the sobriquet 'George W.al-Mart', anti-rebate sites such as TaxRebatePledge.org, DonateRebate.org, and Working Assets, have received an overwhelming reponse. Michael Kieschnick, President of Working Assets, has pledged to match donations up to $1 million on the GiveForChange.com website, and revealed that the company has received $28,000 in donations already, before the rebate checks have even been sent.

Recommended