Some of my relatives have asked me questions about the checks that the IRS is starting to send out, and I’ve been having trouble wading through the hoopla at places like the IRS web site for answers.
Specifically, my sister-in-law is worried that the $600 her family is getting this month will need to be given right back to the IRS come April 15, 2002. They owed a couple of hundred bucks when they filed their 2000 taxes, and are worried that they’ll wind up owing approximately that amount plus $600 on their 2001 return.
I don’t know the answer, so I appeal to the TM for help. I realize that it probably depends on the specifics of her situation, so perhaps what I’m really after is an overview of how these checks will come into play when we’re all filing our 2001 tax returns. I can’t find much beyond 
We’re giving you MONEY!!! in any of the IRS’ documents online.
I’ve seen it written in a couple of places that the tax rates are being changed for 2001, but that withholding amounts aren’t being altered until roughly mid-year. In an attempt to approximately make up for this (and gain political points), much of the population is being given a check now. Ultimately, it’s money out of your 2001 refund check, but it’s better to get it now than later, right? (In which case I should tell my SIL to just stick the $600 in a savings account and forget about it until next April, when they can give it right back and pocket the interest.)
I guess that, in principle, the money now will compensate for over-withholding and the amount owed/refunded come 4/15/02 will be approximately whatever a family is accustomed to. However, the scheme is far to simple for that work out exactly right in most cases, I’d think.
Is my understanding of this even close to correct? Any filled-in details, corrections of gross misunderstandings, or links to relevant threads I may have missed would be much appreciated. 