IRS’s Final Word on Minnesota Rebates: Definitely Taxable

The IRS isn’t backing down on a decision to tax $1 billion in rebate checks distributed by Minnesota to 2.4 million residents last year, a spokesman for the state Department of Revenue said Thursday.

Despite pleas for reconsideration by Gov. Tim Walz (D) and members of Minnesota’s congressional delegation, IRS Commissioner Daniel Werfel said there is no basis for a federal tax waiver on special payments rebating a portion of the state’s surplus to residents. Werfel relayed the agency’s position in letters to Minnesota Rep. Pete Stauber (R) and Rep. Angie Craig (D), made public this week.

“The IRS ...