Nevada parents set to receive checks

By Timothy Pratt (contact)

Thursday, July 24, 2003 | 11:19 a.m.

With the federal government set to mail millions of checks to parents nationwide, Internal Revenue Service officials set up a toll-free number to field questions and comments.

But this week IRS spokesman Larry Wright sounded like the Maytag repairman.

"There has not been a large volume of calls," Wright said. "For the most part, people are patiently waiting."

Federal officials say on Friday the Treasury Department will begin sending up to 25 million checks nationwide -- 199,000 in Nevada -- to parents who declared their children on their 2002 tax returns.

But many parents, who will see up to $400 per child born after Dec. 31, 1986, apparently don't know much about the payments.

Tax preparer Howard Pennington of Rainbow Tax Service in Henderson said he hasn't heard from any of his clients and suspects that's because many people aren't aware of the plan.

"Until people start receiving the money, their attention span is pretty short for these sorts of things," Pennington said. "Tax laws are so complicated that most people don't even think about it."

Under President Bush's tax cut package, the checks are being sent in advance of a 2003 increase in the amount that may be deducted for children. The checks are intended by the president to jump-start the nation's economy.

Whether it will have that effect on the Las Vegas economy depends on whether parents take the windfall to stores or the bank.

Stephen Miller, chairman of the economics department at the University of Nevada, Las Vegas, said that the arrival of thousands of checks in local mailboxes "will probably have a stimulative effect on the local economy ... and should increase consumption."

"Of course, the downside is that consumer debt has been pretty high, so people have to decide whether they will pay down debt or spend it," he said.

Another factor is consumer confidence, which he said is "not where it was a few years ago."

The economist added that, unlike in other states, the federal windfall won't be offset in Nevada by new state taxes, despite the $836 million tax plan the Legislature approved Monday.

"There is a relationship between the two, but only in the broadest sense," he said. "If you don't smoke, drink or gamble, you can avoid a lot of the taxes the Legislature has imposed."

If the money is spent, it will probably be on what economists call nondurable goods and services -- like food and clothing, Miller said.

Nina Massis, a mother of four, already has plans for the money she'll receive -- up to $1,600.

"I'm going to fix up the back yard for the kids ... and finish a pool we're putting in," she said.

Milan O'Hala, a middle school science teacher who was leaving the Henderson Multigenerational Center pool with his two sons Monday afternoon, said he had heard about the payments, but hadn't made any plans in his household. O'Hala could receive up to $800.

"Basically, if it shows up we'll spend it on a big-ticket item like a trip or something," O'Hala said. "If it doesn't, it's OK and doesn't mess up our budget."

Scott Johnson, a father of four who was visiting his mother in Las Vegas from Littleton, Colo., said he hadn't talked much with his wife about the money, but would probably apply it to remodeling his home.

At Lowe's Home Improvement on Marks Street in Henderson, administrative manager Jim Eble said his store hadn't planned any sales to try and capture some of the cash that will flow into the local economy.

In fact, Eble hadn't heard of the payments and found the news welcome.

"I got two kids of my own and I'll be looking forward to that," he said.

Having many people unaware of the payments may explain why the IRS hasn't been fielding many questions about them.

Wright, the IRS spokesman, said the program was straightforward and that most people who declared their children on their 2002 tax returns would be eligible for the credits.

Parents don't have to apply for the payments and the checks will be sent in three batches over three weeks, based on the last two digits of a person's Social Security number. People who filed tax returns late could wait until December for payments.

Angela Best, a Las Vegas mother of two and a member of Mommy and Me, a nonprofit whose local membership numbers 600 mothers, said she was only vaguely aware of the tax plan.

"When it gets here, I'll worry about it," she said, noting that sentiment was shared by others in the various play groups her children are in. "You can get yourself in a mess of trouble if you're counting on money and it doesn't arrive."