Tax the annoying
Rebate plan is official

Rebate pressure on preparers

Yes, Kristine, the new tax rebate law means extra work for you and all your tax preparer colleagues.

That unwanted response is to Kristine's comments on my earlier post on tax rebate winners and losers:

"Hmmm... I just noticed that this rebate is based on your 2007 income. So does that mean if you file an extension, you won't get the rebate check? This could be a much longer tax season than usual if I have to file everyone ON TIME. Geesh!"

Income_tax_frustrastion Sorry, Kristine. I know it's not exactly the news you and all the other already swamped tax professionals wanted to hear. But as the old saying goes, don't shoot the messenger. Well, don't shoot anybody, but you can let your lawmakers know that you don't appreciate them pandering for votes at your added workload expense.

No return, no rebate: A workload that, as Kristine points out, will be growing. Or at least the nagging from clients will increase as, more than ever, taxpayers clamor for their returns to be finished ASAP.

Although the rebate is actually, technically an advance credit on your 2008 taxes, it will be issued based on your 2007 return information. The IRS will start sending out the checks (and maybe even directly depositing them; the mechanics are not yet finalized) in mid-May. That's about a month after the April 15 filing deadline.

If you don't get your 2007 return in by then, you'll be put at the end of the rebate line. And if you get an extension and push your filing to the absolute Oct. 15 deadline, you won't see your rebate money until the fall.

So I'm sure the April compliance factor will be ramped up this year, what with everyone wanting their money sooner rather than later.

Debts will be collected: One other thing to keep in mind. If you owe back taxes or other federal debts, expect the IRS to take that out of your rebate amount.

The same likely goes for delinquent state and local obligations, such as child support. I was speaking with a Taxpayer Advocacy Panel colleague yesterday from Oklahoma. She says the Sooner State has already put out the word that, where applicable, it will be claiming its due portion of any federal rebates.

You can read more about the rebate/advance credit process in this story I did for Bankrate: Tax rebate FAQs.

Comments

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Kristine

Thanks for confirming my fears Kay. Time to stock up on the Excedrin, coffee, etc.

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