WASHINGTON (AP) Notices describing the details of upcoming tax refund checks were headed for the mailboxes of about 112 million taxpayers Monday. The first checks go out at weeks end.
For most people, the Internal Revenue Service notice will contain the good news about the check they will get and when to expect it. Some will find out they wont, and why.
People wont need to call the IRS because weve made the entire process automatic, said IRS Commissioner Charles Rossotti.
The refund checks of up to $300 for a single taxpayer, $500 for heads of households and $600 for a married couple filing jointly are part of the 10-year, $1.35 trillion tax cut signed into law last month by President Bush.
Bush administration officials are also looking at the long-term possibility of overhauling the tax code, said White House spokesman Ari Fleischer. Some advocates of such an overhaul have long pushed for a flat tax, in which all taxpayers are subject to a single rate. Others favor moving to a consumption tax and scrapping the income tax entirely.
Fleischer said the discussions are in the very, very preliminary stage and that a decision was unlikely in the near future.
Theyre looking at a host of ways of making the tax code fairer, flatter, more simple, he said.
The refund checks represent an advance payment for the new 10 percent income tax rate on the first portion of taxpayer income, which is retroactive to Jan. 1. The new rate will remain in place in the coming years.
Some Democratic members of Congress tried to stop the notices by deleting from a spending bill the $33 million needed to pay for them. They complained that the notices, which prominently mention Bush and Congress in the first paragraph, had politically partisan overtones.
But those efforts were defeated. Treasury Secretary Paul ONeill, in letters to Democrats, said the notice emphasizes bipartisanship and that any changes would result in unnecessary cost and delay.
Rossotti said the main purpose of the notice is to inform taxpayers and prevent the IRS from being deluged with phone calls.
Its as easy as opening your mailbox, he said. All taxpayers have to do is cash the check.
For some people, the notices will explain why their refund check is smaller than the maximum amount or that they wont receive one at all. Reasons for this include low taxable income on their 2000 return and offsets such as delinquent child support or education loans.
People who got extensions this year allowing delayed filing of their returns wont get the notice or check until their 2000 tax returns are filed and processed by the IRS. Some who dont qualify for a check, such as a person who was a dependent on someone elses return in 2000, could claim a credit on next years return if their status has changed.
The checks start going out Friday, beginning with taxpayers whose Social Security numbers end in 00 through 09. They will continue each week through the end of September, when taxpayers whose Social Security numbers end in 90 through 99 should receive their checks.
Internal Revenue Service: http://www.irs.gov
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