Uh....about those checks?

Why am I not surprised that the Bush Administration's IRS isn't going to be able to process these much-vaunted "stimulus"* checks in time to make a difference?

The checks will be in the mail — eventually.

But President Bush’s plan to send payments to 117 million households to stimulate the economy would impose major strains on the Internal Revenue Service, delays in answering calls to the agency and require a host of technical rules to determine who ultimately collects the benefits, officials said Thursday.

The deal between the administration and House leaders calls for checks to be issued 60 days after the president signs a law authorizing the one-time payments. That may be in as few as four or five weeks if the full House and the Senate come to terms on the details quickly.

In theory, the first checks may arrive in early May, if nothing goes wrong.

Even as the negotiators crunched the numbers, the Congressional Joint Committee on Taxation warned that the tax-filing season could be disrupted and hinted that it might be June before checks were issued.

I.R.S. computer and other systems “are today fully engaged in processing 2007 tax returns,” the committee said Monday in a report. “As a result, it is not practical to contemplate distributing cash rebates until the peak filing season is completed, which in past years has been the very end of May.”

At the very least, the agency needs to have in hand the annual returns for last year to know who is married and who has dependent children, information that often changes.

The size of the checks will also depend on incomes and other factors. For example, individuals would not qualify for the $300 payments if they earned less than $3,000, unless they paid taxes on unearned income like pensions and interest.

Although many people who owe no income tax will receive checks, none will be sent to people who pay their taxes through withholding but do not file returns, said Anthony DeSouza, a spokesman for the Treasury Department. Because the withholding tables typically collect slightly more tax than is owed, those nonfilers are seldom pursued.

The prospect of collecting the stimulus payments may spur some of those taxpayers to file returns, after all, adding to the logistical strain and increasing the drain on the Treasury, which would have otherwise kept their money.

Determining who is eligible and for how much money will require major reprogramming of an outdated computer system that relies on technology long since abandoned by business. The software changes will have to be made as an estimated 135 million individual income tax returns arrive between now and April 15.

The Democratic candidates for the presidency ought to be all over this, not because of the delay in getting these ridiculous vote-bribes out to the public, but because it's yet another symptom of what happens when Republicans decide to reduce government so much that you can "drown it in a bathtub." For twenty-eight years, Democrats have allowed Republicans to brand them as "the party of tax and spend", when they should have been fighting back against the party of "borrow and shovel the borrowed cash into the pockets of our friends." Because the borrowed money sure as hell isn't going to fund government agencies. In fact, even though the IRS was deemed to be underfunded earlier in 2007, the House cut funding even further in December:

The omnibus appropriations bill passed by the House last night contains 3,500 pages and over $516 billion in spending. Yet with all that space (and money), Congress could not find enough room for even their own priorities from earlier this year for the Internal Revenue Service (IRS). Specifics of the IRS's funding take from the omnibus show the House has included $2.15 billion for taxpayer services, down slightly from the $2.155 proposed earlier this year, $4.78 billion for enforcement (down from $4.93 billion) and $3.68 billion for operations (down from $3.77 billion). What's more, the House has backed away from a requirement for the IRS to develop a strategic plan to address the tax gap. The total IRS budget request ($10.89 billion) is $203 million below even President Bush's request!. What is going on here?

So, just to review, despite a year in which congressional hearings revealed that the IRS is underfunded, runs a dangerous and wasteful privatization program, and has no strategic plan for addressing the tax gap, Congress decided to give it less money, allow the privatization program to continue, and let the IRS off the hook for developing a strategic plan.

I guess they had forgotten about this when they decided to toss a few coins at the peasants.