Home>Legal>Mayes to Back Republican Tax Rebate Against Fed Grab

Arizona Attorney General Kris Mayes speaking with attendees at the 2023 Legislative Forecast Luncheon hosted by the Arizona Chamber of Commerce & Industry at Chase Field in Phoenix, January 6, 2023. (Photo: Gage Skidmore)

Mayes to Back Republican Tax Rebate Against Fed Grab

Threatens legal action if the Biden IRS fails to reconsider its intentions to tax the relief funds

By Steve Kirwan, January 27, 2024 1:08 pm

In a rare moment of true bipartisanship, Arizona’s Democrat Attorney General Kris Mayes came out swinging in support of the Republican tax rebate for families. The IRS has signaled its intent to collect taxes on the rebate passed by Republicans in May of 2023. The rebate allowed families that included dependents on their 2021 tax returns a rebate of up to $750 was offered to help combat Biden’s rampant inflation. Arizona lawmakers acknowledged that families raising kids faced the greatest negative impact from unchecked cost increases, promising a small measure of relief. Unfortunately, severe budget shortfalls in Washington placed the rebate squarely in Biden’s crosshairs.

In a statement issued Thursday, January 25, 2024, Mayes advised, “The IRS should act promptly to reverse this decision and provide clear guidance to Arizona taxpayers as tax season nears. If they do not, my office is prepared to examine all legal avenues to ensure these dollars stay in the pockets of Arizona taxpayers.”

According to the letter Mayes sent to the IRS, the rebate should be exempt from taxation. The letter addressed to IRS Commissioner Daniel Werfel, stated, “Under the IRS’s 2023 guidance, the Tax Rebate should be excludable from federal income under the general welfare exclusion—or, at a minimum, it should be excludable to the extent a Rebate amount does not exceed state taxes that a taxpayer actually paid and did not deduct  from his or her federal income.”

Mayes’ letter continues by quoting IRS rules, offering a clear and compelling argument that this rebate should not be taxable. She requested a response by February 6, 2024, and threatened legal action if the issue was not resolved in a satisfactory manner. See the letter here.



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