IRS Rebate Problems
When Congress approved a massive economic stimulus package in the form of an Internal Revenue Service (IRS) rebate, it created many logistical problems for the agency, which is much better at collecting tax money than giving it away. Some problems were because of the volume of the giveaway and that the IRS did not have a tested system for rebates on that scale. But many problems were the result of taxpayer data entry errors. Also, the event provided an for scam artists to bilk Americans out of their stimulus. Problems with IRS refunds and rebates do not only occur with a stimulus program, which is why the agency maintains a website that allows taxpayers to track their refund checks.
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Taxpayer Errors
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In 2008, almost 350,000 households received a rebate smaller than they were entitled. The primary reason was because they failed to check the box on their previous returns, on which the rebate was based, indicating that their children were eligible. Thus, more than one-third of a million households missed the chance to receive an extra $300 payment from the government for their children. In a far fewer number of instances, married taxpayers with spouses who did not have a Social Security number were disqualified from receiving a rebate by filing jointly. For some, the problem was with tax preparation companies--particularly software companies--that did not include the necessary information with the previous tax return, resulting in no rebate being paid.
IRS Errors
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The IRS made its share of mistakes as well, primarily with electronic rebates. In 2008, at least 15,000 tax rebates were directly deposited in the wrong bank accounts. It was the result of a computer glitch. Less obvious errors occurred in situations where more than one account was indicated to receive direct deposits. For example, some divorced couple had their separate rebates deposited entirely in one ex-spouse's account. Others, who normally route their IRS refunds to retirement accounts, were unable to spend their rebate because of early withdrawal penalties.
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Scams
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The IRS warned in early 2008 that the pending stimulus rebate check was already creating new scam opportunities. Most of these centered around phishing, the use of fraudulent emails and offers to solicit sensitive information or deliver spyware. Thousands of taxpayers received emails claiming to be from the IRS and prompting them to enter their Social Security number and other information to receive their rebate. Other such emails automatically installed malicious programs onto the recipient's computer that relayed passwords and other data to the sender. The IRS warns that it never operates by requesting information from taxpayers online.
Lost or Damaged Checks
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A perennial problem with IRS refunds and rebates are paper checks that are lost, stolen or destroyed. The IRS offers Form 3911 for taxpayers to report such rebate problems and receive a replacement check. If, for example, your check was destroyed in the mail or accidentally washed in the laundry, the remnants of the check can be returned with Form 3911 for a replacement. Also, U.S. Treasury checks expire one year after the date of issuance. If you have not deposited your check and it has expired, you can also receive a replacement with Form 3911. A new check usually takes about six weeks to arrive.
Checking Status Online
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Once the IRS receives your tax return, you can trace the status of your refund online at the "Where's My Refund?" home page. This takes about 72 hours after filing electronically or two to three weeks after mailing a paper return. The IRS will indicate when a refund has been sent, the method and the destination address of a paper check. If, after 28 days, the refund has not been received, you can initiate a refund trace that can lead to a new check if necessary.
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References
Resources
- Photo Credit U.S. Department of the Treasury
