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REBATES: LOAN SHARK STIMULUS?

February 15, 2008

The Tick Marks blog points out how the rebate plan creates a lucrative new market for the storefront tax preparation industry:

IRS Acting Commissioner Linda Smith says that taxpayers must file to get the tax rebate, even if they have no tax liability, because the law requires at least $3,000 in qualifying income to be eligible for even a $300 rebate. Additionally, the taxpayer must file with an valid Social Security Number; Individual Tax Identification Numbers are not sufficient to prevent undocumented workers/illegal aliens from receiving rebates. The IRS has budgeted just over $200 billion for the checks and additional processing costs; the agency expects an additional 10 to 20 million returns.

Count on the loan-shark sector of the tax prep industry to roll out "rebate anticipation loans" with effective rates that would make Loan Max jealous.

Kiplingers has posted on online rebate calculator (hat tip: The TaxProf).

Tags: rebates.stimulus.