The IRS is warning taxpayers of a new telephone identity theft scam that uses the Tax Rebate checks as the bait.

In this scam, the caller identifies himself as an employee of the IRS or the Treasury Department. The caller then tells the victim that he is eligible for a large rebate check for filing a 2007 tax return as early as possible. The catch is, the caller must have the victim's bank account information so that the rebate check can be directly deposited by the IRS. If the victim refuses, he is told he cannot receive the rebate.

Taxpayers who had already filed their 2007 federal income tax returns before the bill authorizing the income tax rebate checks became law on Feb. 13, do not need to do anything more to receive their payment, as long as they reported at least $3,000 in qualifying income, according to the latest IRS Facts about the 2008 Stimulus Payments.

Based on the Economic Stimulus Bill as passed by Congress, persons with income from Supplemental Security Income (SSI) alone will not qualify for a tax rebate check.
The law authorizing the rebate checks (H.R. 5140) specifically limits qualifying income from Social Security benefits to "any amount received by the taxpayer by reason of entitlement to - (A) a monthly benefit under Title II of the Social Security Act, or (B) a tier 1 railroad retirement benefit."

SSI is authorized under Title XVI of the Social Security Act, not Title II.

Among the many IRS Facts about the 2008 Stimulus Payments -- the tax rebate checks -- parents should note the fact that dependant children, including newborns, must have a Social Security number in order to qualify for the additional $300 per child tax rebate.
While getting a Social Security number for children is totally optional, it is still a good idea. Aside from the $300 tax rebate bonus, having Social Security numbers for you kids allows you to open banking and savings accounts in their names, add them to your health care coverage and qualify them for government services and benefits.

Once taxpayers began to get a handle on how big a tax rebate they would get, they started wondering if they would have to pay taxes on it next year. At last, the IRS has provided the answer.
According to the IRS, you will not owe taxes on your rebate when you file your 2008 income tax return. However, you should keep a copy of the IRS letter you receive later this year listing the amount of your payment. In the event you do not qualify for the full amount this year but you do next year, you will need to have the letter as a record of the amount you previously received.

Persons who are not normally required to file a tax return, but must do so this year in order to receive a 2008 tax rebate check, may now file for free by using the IRS Free File - Economic Stimulus Payment program.
The IRS and several of its partners in the Free File Alliance can now accept returns submitted by people who have no legal requirement to file other than to receive their payments. People in this category should use only the five companies listed on the IRS Free File - Economic Stimulus Payment web page.