I'm a tax professional in California.  The IRS has said to wait until it makes a decision on whether or not the California Middle Class Tax Refund is taxable or not.  Well I've taken the position that I'll file my client's Federal tax return and include a statement indicating just how much "Refund" the client(s) received and a copy of the 1099-MISC.  I'm disclosing the amount received, a copy of the 1099-MISC and even a note what the additional tax (if applicable) would be by including the "Refund". I also indicate an Amended Return will be filed if / when a decision is made ... unless the IRS will be making the necessary adjustments.  

I can't see holding up a client's refund by waiting for the IRS to make a decision on the taxability of what appears to be a NON-TAXABLE event.  The Stimulus checks weren't taxable and the "Refunds" issued by the state of California was to relieve Californians of the "Runaway Inflation". I'll truly be surprised if the "Refund" will be taxable and can see possible litigation should the IRS tax it.