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Tab for notifying taxpayers of rebates: $42m

130m households to get IRS letters

Email|Print| Text size + By Devlin Barrett
Associated Press / March 8, 2008

WASHINGTON - 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, John Lipold, IRS spokesman, 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.

Democrats accused the Bush administration of wasting time and postage.

"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," Senator Charles Schumer said yesterday, arguing that the IRS could more effectively spend the money to catch tax cheats.

Keith Hennessey, director of the president's National Economic Council, said the letters are being sent to explain how the tax rebates will work. "Any time you do something as a government tens of millions of times, there is ample room for people to get confused," Hennessey said.

"You want to get the information out so that you have as few people as possible confused about what's happening - they understand what's coming, and it reduces the number of incoming requests that IRS and Treasury have to figure out how to deal with it," he said.

"Dear Taxpayer," the letters will begin. They will go on to say that the IRS is pleased to inform the recipient that Congress passed and President Bush signed into law a plan that will provide payments of up to $600 for individuals who qualify or $1,200 for married couples filing jointly. The rebates are the centerpiece of a $168 billion economic stimulus package.

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, $600 for a couple filing jointly.

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