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. Stiff says that the IRS will work with the Social Security Administration and Veterans Affairs to make sure that qualifying seniors and veterans are aware of the need to file.
The filing requirement is interesting and will likely provide extra work for tax preparation businesses, enrolled agents, etc. This may also place an additional burden on VITA volunteers. A potentially interesting unintended consequence--some qualifying people may not file to get the refund to avoid having to declare unreported income.