Cost of IRS rebate letters engenders comment

Over the weekend, the Internal Revenue Service received a lot of attention from Op ed columnists, letter writers, and general news media, in this case because the agency spent $42 million to mail out 130 million letters to individuals who filed a 2006 federal return telling them that they might receive a rebate. Taxpayers who expect to file for 2007 were told that checks would be mailed in May for $600 (or $1,200 if filing jointly), along with an additional $300 per child, and that to receive the payment, the taxpayer did not have to do anything.

A sampling of comment includes: from the Associated Press, "At a cost of nearly $42 million, the IRS wants you to know: Your check is almost in the mail." And from the Altoona Mirror in Altoona, PA, "What would you do with $42 million? Retire? Take an extended vacation? Buy a mansion? . . . Is there anyone who hasn't heard about the rebate checks from the news over the past few months?"

Apparently the sense of outrage was bipartisan. Senator Tom Coburn (R-OK) joined Senator Charles Schumer (D-NY) in criticizing the cost of the mailing, according to In-Forum.

In fairness to the IRS, the letters provided information about who qualifies for the rebate, reminded people to file their 2007 returns promptly, and said that future mailings would be directed to those who receive Social Security and railroad retirement benefits. This last, however, might also lead to some head scratching, because it is not easy to understand why people who are already expected to file need this information.

The IRS is making an effort to reach as many individuals who might qualify as possible, to let them know that they must file a return to receive a rebate. The next mailing, to 20 million Social Security and railroad retirement beneficiaries, is a 10-page packet containing everything the recipients will need to file a 2007 return, including information, tips, and both a sample 1040A and a blank 1040A, the Associated Press says.

You may like these other stories...

Did you know that the tax code allows you to claim tax deductions for household damage caused by thefts, vandalism, fires, floods, hurricanes, and others kinds of casualties? But the law imposes several restrictions.Relief...
Inversions: Loophole Is the ProblemJacob J. Lew, the U.S. Treasury Secretary, published an opinion piece in the Wall Street Journal that "the system has become full of inefficiencies and special-interest loopholes. That...
School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.