October, already a big month for the IRS, is even busier this year.
Not only is the agency processing the millions of returns filed on the final Oct. 15 extension date, it also will be processing the economic stimulus payments for those taxpayers.
And, oh yeah, it will be sending out some tax rebates that it previously said could not be delivered because of name and Social Security mismatches.
A taxpayer by any other name: Although the tax ID number delay isn't a new policy, it took on extra significance this year as folks anxiously awaited their stimulus rebate checks.
Among those who've been waiting to get money to do their part to boost the economy were more than a quarter million married couples.
Typically, when a couple marries and a spouse, usually the wife, changes names, the woman is supposed to alert the Social Security Administration. The IRS has long told taxpayers that if that doesn't happen, then when a return is submitted, the mismatched name and ID number could cause problems.
The agency was just following that policy with the rebates. And the IRS originally stood firm, saying that stimulus checks would go only to those filers whose names and Social Security numbers were identical matches.
Now, however, the IRS has backed off.
Now I'm not saying that this being an election year, combined with our economy crumbling, had anything to do with the agency's slowly backing away from standard operating procedure.
I'm just letting you know that the IRS is in the process of sending out stimulus payments to around 260,000 married taxpayers whose names did not match Social Security numbers.
If you're one of those couples who has been waiting for your rebate, you should be getting a letter announcing the change of position any day now. The IRS says the actual checks should arrive by the end of October.
Uncle Sam's sorry: As you might expect, the IRS didn't make a big to-do about its change of heart. Buried in an October update of the Q&A Web page When Will I Get the Payment?, the IRS included the following on the married name mismatch topic:
Q. After my family didn't receive a stimulus payment earlier this year, I was surprised to learn my name didn't match my Social Security Number. When will we get the stimulus payment?
A. The IRS will send letters and economic stimulus payments in late October to 260,000 additional married taxpayers whose names did not match Social Security records. During the processing of the 2007 returns for these taxpayers, the IRS was able to determine that the person listed on the return actually was the person associated with the SSN. These taxpayers were inadvertently omitted from the initial economic stimulus payments. They will receive a letter from the IRS stating the amount of their payment approximately two weeks before receiving the payment itself and will not need to take any additional action. In mid-October, people also can use Where's My Stimulus Payment? on IRS.gov to track their payments.
The IRS added that it "regrets the inconvenience for these affected taxpayers and will continue to work hard to deliver stimulus payments to qualifying taxpayers."
Today's Tax Tip: Did you marry this year? Congratulations!
But if after you said "I do" you changed your name and haven't yet let Uncle Sam know, tell him now.
This is important every tax season, but since it looks like we'll be going through rebate check chaos again in a few months, it's even more critical. You definitely want to make sure when that happens, you get your next round of tax cash ASAP.
Even in what passes as normal tax filing times, you need to make sure your Social Security number is entered correctly on your return. If it doesn't match, either because you changed your name and didn't register the new moniker with the Social Security Administration or simply transposed some digits, it will cost you. Just ask those folks who just now are getting their rebate payments.
As this latest instance shows, the mismatch could stall receipt of money due back from the IRS. Or it could literally cost you more if incorrect numbers lead the IRS to disallow a tax break.
To alert the feds of your new name file Form SS-5. You can download it at this Social Security Administration Web page. You also can call (800) 772-1213 to request one or drop by a local Social Security office (find the one nearest you here) and pick up the form.
You don't have to tell the IRS directly of the change. It will simply check with its sister agency when it needs to verify that you and your tax ID number are in synch.
And note that it works both ways. If you divorce and decide you want your original surname back, let the Social Security Administration know that, too.