The Cellar - IRS spending $42 million on rebate reminders

Quote:

WASHINGTON (AP) -- At a cost of nearly $42 million, the IRS wants you to know: Your check is almost in the mail. The Internal Revenue Service is spending the money on letters to alert taxpayers to expect rebate checks as part of the economic stimulus plan.

The notices are going out this month to an estimated 130 million households who filed returns for the 2006 tax year, at a cost $41.8 million, IRS spokesman John Lipold confirmed.

That works out to about 32 cents to print, process and mail each letter. It doesn't include the tab for another round of mailings planned for those who didn't file tax returns last year but may still qualify for a rebate.

"There are countless better uses for $42 million than a self-congratulatory mailer that gives the president a pat on the back for an idea that wasn't even his," Sen. Charles Schumer said Friday, arguing the IRS could more effectively spend the money to catch tax cheats.

The actual rebate checks are scheduled to go out starting in May, after the IRS has finished separately mailing out routine refunds for the 2007 tax year.

The letters will be a reminder that people need to file a 2007 tax return so they will receive the rebate if they are eligible for it.

Similar notices will go out later to some Social Security recipients and those who receive veterans benefits -- groups that often do not file tax returns.

For those people to get a rebate check, they will need to file a tax return if they received at least $3,000 from a combination of certain Social Security benefits, veterans benefits and earned income. The minimum payment for this group will be $300 for an individual and $600 for a couple filing jointly.

Not everyone will be eligible. Singles with income of more than $75,000 and couples with more than $150,000 get only partial rebates, if any.

People who earn less than $3,000, illegal immigrants and anyone who does not file a tax return will miss out. Singles with incomes exceeding $87,000 and couples with incomes exceeding $174,000 also won't qualify, although those caps rise by $6,000 per child.