In the month since President Trump signed a record $2.2 trillion coronavirus relief package, the IRS has been scrambling to implement key aspects of the measure at a time when most Americans are desperate for government aid.
The IRS has won praise from experts for its ability to start implementing the law quickly, but its work hasn’t been perfect. The agency has been a source of frustration for tens of millions of Americans who are still awaiting their direct payments from the CARES Act that was signed into law on March 27.
Those familiar with the inner workings of the IRS say the agency deserves some credit, especially since it has had to carry out the law’s provisions during tax-filing season and while most of its employees have been directed to work remotely due to the pandemic.
“I think it’s a minor miracle that the IRS has been able to pull off any payments that have gone out,” said Nina Olson, the former national taxpayer advocate who now is executive director of the Center for Taxpayer Rights.
She said the slip-ups that have arisen have rightfully frustrated taxpayers but that it’s impressive that the agency has started to make payments.
The IRS has long faced challenges, namely old technology systems and a budget and workforce that is much smaller than it was a decade ago.
But in just the past six weeks, the pandemic has prompted changes to the agency’s normal operations and practices, from extending the tax-filing season to closing its offices.
Most notably, though, the IRS has been implementing a section of the CARES Act that provides for direct payments to most American taxpayers. Individuals making less than $75,000 and married couples making less than $150,000 qualify for the full amount of $1,200 per adult and $500 per child.
The IRS has already sent out a substantial portion of the payments. As of April 17, it has issued nearly 90 million payments, out of the more than 150 million it expects to make in total. The IRS said it has disbursed more payments since then — last week it started issuing paper checks, and non-filers who receive Social Security benefits are expected to see payments hit their bank accounts on Wednesday.
“Economic Impact Payments are being delivered to Americans in record time, and at a vastly better rate than virtually anyone expected,” a Treasury Department spokesperson said. “In fact, the last time a similar effort was undertaken, in 2008, it took several months to deliver the first 800,000 stimulus checks.”
Still, some issues have come up. Experts said glitches were bound to occur.
For example, the IRS launched a web tool on April 15 called Get My Payment that allows people to provide the agency with their direct deposit information and track the status of their payments. Interest level has been high, leading to wait times for some people to access it when it first launched. Some taxpayers also reported difficulty inputting their information, receiving a message that their payment status wasn’t available.
Former Treasury and IRS officials said that normally the IRS would have time to do testing, such as setting up a pilot program, but that it didn’t have time for that now.
“When you do it all at once … you’re going to find the bugs quickly,” said John Koskinen, who served as IRS commissioner from 2013 to 2017.
Treasury and the IRS announced over the weekend that it had made some enhancements to the online tool.
“They seem to be trying to be keeping up with issues that have come up,” said Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center who has previously worked at Treasury.
Tax experts said other issues could have been predicted, such as people receiving payments for dead relatives or money being sent to temporary bank accounts.
Those types of issues may not have been fully preventable, but the IRS “could have calmed taxpayers down and done some proactive communication,” Olson said.
Lawmakers and tax experts have also expressed frustration with the fact that the IRS announced tight deadlines for non-filers who receive certain federal benefits to submit information to the agency in order to have the amounts for their children added to their automatic payments. The agency announced a deadline of April 22 for Social Security and railroad retirement benefit recipients only two days before that date and on Friday announced that Supplemental Security Income and veterans benefit recipients have until May 5 to take action.
The IRS has said that people with children who miss the deadlines won’t be able to receive the payment amounts for their children until they file their 2020 tax return next year.
Treasury has said the deadlines are needed in order to ensure that as many people as possible receive payments as quickly as possible.
Lawmakers have been pushing Treasury to see if it can find a way for benefits recipients who miss the deadlines to receive the amounts for their children prior to next year.
The direct payments aren’t the only part of the CARES Act that the IRS has been working to implement. The agency has also started providing guidance for provisions that ease restrictions on net operating losses for businesses, allowing businesses to deduct more of their interest expenses and provide payroll support to air carriers.
In order to resume some of its key responsibilities, the IRS has asked thousands of employees to volunteer to return to work this week. Those who return will receive a boost in pay. The IRS said it’s important for the agency to be able to restart some of the work it hasn’t been doing while employees have not been in their offices, such as opening paper mail, processing paper tax returns and answering taxpayer questions by phone.
“To ensure the health and safety of IRS employees returning to individual work locations, the IRS will continue to implement, follow — and where possible exceed — specific federal safety guidelines and measures, including social distancing at all facilities,” the agency said in a statement.
Chad Hooper, president of the Professional Managers Association, which represents management officials in the federal government, said the IRS asked about 11,000 employees to return to agency facilities. He said the IRS initially said it may not be able to provide all workers with personal protective equipment but that the agency later informed his association it was able to obtain masks, disinfectant and hand sanitizer.
A Democratic aide said lawmakers still want to hear from the IRS about whether the agency will be following all of the federal health protocols for businesses.
Tony Reardon, president of the National Treasury Employees Union (NTEU), said in a statement Tuesday that “there remains a fear among employees that by returning to these worksites their health is at risk along with that of their families, so they are cautious in their return.”
“All those reporting to IRS facilities this week are volunteers stepping up to get critical work done,” he said. “NTEU is proud to represent them and the thousands of employees who continue to perform the mission of the IRS remotely.”