Check’s in the Mail: The IRS is Trying to Pay Taxpayers $266 million
by Byrne Hobart
The IRS has recently announced that hundreds of thousands of stimulus and rebate checks haven’t made it to their intended recipients. You can blame out-of-date mailing addresses and social security number snafus.
Fortunately, the IRS is bending over backwards to make sure these get delivered. They’ve publicized the issue (though 383,000 wrong addresses out of over 100 million tax filers doesn’t call for much of a mea culpa), and they’ve whipped up some useful tools for curious taxpayers:
- Visit their Where’s My Refund? service for information on your refund.
- Check Where’s My Stimulus Payment? for stimulus payment data.
It’s almost inevitable that this will lead to a new a new generation of advance-fee frauds, so be on the lookout. An unsolicited email about how you can get the returns you’re owed — for just the smallest of fees! — should be trashed immediately.
One obvious question that comes up in a situation like this is: how much does this cost us, as taxpayers? Obviously, the IRS is holding on to money that would otherwise be ours to spend. Does the economy suffer for it?
There are two popular theories, both supported by stirring rhetoric and elegant mathematics, and both leading to precisely opposite conclusions.
The first is the theory behind the stimulus: that people who find themselves with more cash will spend it, helping businesses get rid of excess inventory, increasing production, making banks more comfortable about loans, causing the economy to grow, which increases spending, helping businesses get rid of excess inventory… etc.
The other popular theory holds that the stimulus does exactly the wrong thing. First, it decreases the value of a dollar: the government printed up more money, but didn’t create more value, so we all have more bills, each of which buys less stuff. At the same time, the stimulus was proportionately better for the people who had the least savings, and worse for those with the most. In other words, it was a tax on prudence, paid to the profligate, and sure to lead us down the path of more bad loans and financial crashes in the future.
The pro-stimulus side is probably waiting for a second rush of consumption and growth once those extra checks find their way to the intended recipients. The anti-stimulus side would expect more inflation, and less care on the part of lenders.
This isn’t an argument that can be easily resolved, but at least the case of the missing rebate and stimulus checks will give each side something new to talk about.