Tax News

CCH (cch.taxgroup.com) reports:

  Contrary to recent news reports, some taxpayers will not receive their economic stimulus payments later than others because the IRS is using an "old" processing system, the Service told CCH on May 6. The IRS is using two systems, the Customer Account Data Engine (CADE) and its regular system, to process returns in 2008, a spokesperson explained. CADE processes on a daily basis, whereas the Service's regular system processes on a weekly basis. Nonetheless, recipients of economic stimulus payments will receive their payments no later than the dates identified in the IRS's distribution schedule, the spokesperson said.

Accelerated Distribution

  On April 25, President Bush announced that qualifying individuals would receive their economic stimulus payments ahead of schedule (TAXDAY, 2008/04/28, I.1). The IRS had previously indicated that direct deposit of the economic stimulus payments would begin on May 9 and paper checks would start to be mailed on May 16 (IR-2008-44; TAXDAY, 2008/03/18, I.5). After the president's announcement, the distribution schedule was moved up one week. Direct deposit began on April 28. Paper checks will start to be mailed on May 9.

  Economic stimulus payments are being direct deposited or mailed based on the last two digits of the recipients' Social Security number (TAXDAY, 2008/03/18, I.5). The first batch of economic stimulus payments was direct deposited during the week of April 28 and the second batch is being direct deposited during the week of May 5.

Processing Systems

  Recently published reports indicated that the IRS is using two systems, one "old" and one "new," to process the economic stimulus payments. These reports further stated that the new system is faster than the old system. Consequently, payments processed by the new system were reportedly being processed more quickly.

  There are two systems, the spokesperson explained, but they are for processing returns. Individual returns are being processed on a daily basis by CADE and on a weekly basis by the IRS's regular system. Regardless of which system processes the individual's return, he or she will receive an economic stimulus payment by the dates identified on the Service's distribution schedule, the spokesperson said.

  Payments were direct deposited no later than May 2 for recipients whose Social Security numbers ended in 00-20, the spokesperson explained. Individuals in the second batch of direct deposit, those with Social Security numbers ending in 21-75, will have their payments transmitted by May 9. The third batch of direct deposit payments, for individuals whose Social Security numbers end in 76-99, is expected to be transmitted by May 16.

  By George L. Yaksick, Jr., CCH News Staff