IRS computer glitch leads to mistakes in rebate notices

The Internal Revenue Service on Tuesday said a programming error in the agency's computer systems resulted in more than 500,000 taxpayers receiving letters containing incorrect information about their upcoming tax rebates. The agency said the letters exaggerated the size of the rebate that those taxpayers will actually receive. The IRS sent out 112 million letters this week notifying taxpayers about whether they would receive a rebate, how much it would be and when it could be expected. The IRS was assigned to send rebates to taxpayers under the 2001 Economic Growth and Tax Relief Reconciliation Act. IRS Commissioner Charles O. Rossotti issued a statement Tuesday owning up to his agency's mistake. "After the letters were printed, we found that a small fraction-less than one-half of 1 percent-have a payment amount that is greater than the check actually will be," he said. He said more than 99.5 percent of taxpayers were sent letters with the correct information. Rossotti said the programming error affected only the letters--the checks will be correct when they are mailed beginning this week. The IRS plans to send the misinformed taxpayers a corrected letter by next week.