WASHINGTON -- More than half of the individual federal tax returns identified with errors had mistakes related to last year's rebate, a new report by non- partisan congressional investigators says.

Overall, the report by the General Accounting Office calls the one-time rebate -- technically, a rate reduction credit -- a "major accomplishment," but cautions its enactment was not entirely without problems.

Perhaps one of the most significant negatives was the confusion of tax filers. In returns due this April, 7 million individual returns, or 6.5 percent of all individual returns processed, had errors related to the rate reduction credit.

The one-time rebate was part of a 10-year, $1.35 trillion tax cut approved by Congress a year ago. Individual filers got as much as $300; the maximum advanced tax refund for a married couple filing jointly was $600.

Over six months last year, the Internal Revenue Service mailed about 86 million advance refund checks, totaling about $36.4 billion.

The study finds that most taxpayers were notified accurately and promptly about their rebates. Computer problems and bad addresses led to a few glitches -- about 548,000 checks were returned undeliverable because of incorrect addresses.

And the problems leeched into the 2002 tax-filing season. About 57 percent of all returns identified with errors during processing by the agency had mistakes related to the credit. Additionally, 300,000 electronic tax submissions were rejected because of rate reduction credit errors; the taxpayer had to correct the error before the Internal Revenue Service would accept the return for processing.

The need for telephone assistance also soared. Call attempts to an agency help line increased by 84 percent over the previous year during the advanced tax refund period.

The General Accounting Office recommends the agency convene a study group to assess the agency's performance. In a brief written response, Commissioner Charles Rossotti said he has asked a division head to conduct a brief review.

Charleston Daily Mail

-- Anonymous, August 10, 2002