John Burke writes:

> The tax cuts, changes, whatever, are retroactive to January 1 of this year.
>  However, the new withholding tables did not go into effect until July 1.
>  Thus the "rebate" "advanced refund", etc. is supposed to approximately
cover
>  the "excess" withholding for the first six months and is based upon your
>  prior year tax return.
>
>  In the extreme case that you will not work at all this year, for some other
>  reason, owe no tax for 2001, you do not have to pay back the "advance
>  refund". For those of us whose 2001 return will closely resemble our 2000
>  return, "advance refund" pretty much describes the check. It represents
>  money we would get next spring either in the form of a refund for
>  overpayment or in a smaller amount owed.

John has it right.

While Ron argues with the use of the term "loan" in the sense that you don't
have to pay it back, in effect, you do have to pay it back next spring.
Whatever amount you receive in this check will be deducted from whatever
refund you would have received then.

The primary error that I would emphasize again in my original posting was
that if the amount of the check you receive now is larger than your 2001
calculated refund, I now know that you don't have to pay back the overage. If
that had been true, I could only imagine people being exceptionally upset,
thus it was politically wise of those who put this procedure together to
forgo that money, not to mention the impracticality of trying to collect it
back.

While the people who are calling us now tend to be irate because either
they're getting no refund or a very small one, we expect that many more will
be upset next spring when they find that their refund will be smaller than
would otherwise expect. While everyone's taxes are reduced a bit, the 5%
number that is being used to calculate this refund occurs in the minimum tax
bracket, which had the largest percentage change. For most people, this
coming year's taxes will be very similar to last year's.

Under any circumstance, it now seems evident that (i) you will be required to
keep track of your advance refund amount and that (ii) you will subtract that
amount from the refund that would have otherwise received.

Wirt Atmar

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