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IRS Experiences Tax Rebate Glitches

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Washington, D.C. (May 21, 2008)

By WebCPA staff

The Internal Revenue Service said that it would mail out approximately 350,000 additional economic stimulus payments starting in early July, after discovering that some tax returns did not capture the information needed to generate the $300-per-child payments.

In some instances, the IRS said, taxpayers did not check the proper box to trigger the $300 child payment. In other instances, a few tax software products primarily used by tax professionals did not capture the proper information needed for issuing the child stimulus payment.

The IRS has worked closely with the two affected software vendors, and they have reported to the IRS that their software has been corrected. They are Petz Enterprises’ professional and online software, and CCH’s ProSystems fx Tax software and online CompleteTax software.

To fix the problem, the IRS is taking extra steps to identify the affected taxpayers and send them separate checks to cover their qualifying children. The IRS emphasized that the corrected checks will be mailed automatically, and taxpayers don’t need to call or take any additional steps.

The IRS also said that it has deposited about 1,500 tax rebates and economic stimulus payments in the incorrect bank accounts. The IRS is working on a case-by-case basis with taxpayers and banks to fix the problem.

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