The IRS is facing a handful of obstacles in its efforts to deliver the final batch of coronavirus relief checks.
While the overwhelming majority of direct payments have been sent to Americans’ bank accounts or mailboxes, there are a few challenges in getting the remaining rebates to eligible households.
The Treasury Department, which oversees the IRS, said Wednesday that about 159 million payments have been distributed and that payments have gone out to all eligible Americans who have the necessary information on file with the IRS.
But some people who qualify still haven’t received their payment.
“The last people we reach are some of the folks who need it the most,” said Chantel Boyens, principal policy associate at the Urban Institute.
The $2.2 trillion coronavirus relief package that President Trump signed on March 27 mandated the IRS issue one-time payments of $1,200 per adult and $500 per dependent child. Individuals making up to $75,000 and married couples making up to $150,000 are eligible for the full amount, and the amount phases out for households above those income levels.
Individuals with income above $99,000 and married couples with income above $198,000 and no children are not eligible.
The IRS has worked to issue the payments in a prompt fashion, winning praise from tax professionals and lawmakers on both sides of the aisle.
On Wednesday, the Treasury Department moved a step closer to taking a victory lap by announcing that 120 million of the payments were sent by electronic funds transfer, 35 million were sent by paper check and 4 million were delivered through new prepaid debit cards.
“The Trump Administration has delivered 159 million Economic Impact Payments worth more than $267 billion to Americans in record time,” Treasury Secretary Steven Mnuchin said in a statement. “These payments are an integral part of our commitment to providing much-needed relief to the American people during this unprecedented time.”
The figures Treasury announced Wednesday are in addition to more than $2.5 billion that have been disbursed to U.S. territories to be paid to residents in those jurisdictions.
Tax experts said the IRS faces a tough road ahead in getting payments to everyone who hasn’t received theirs yet, especially for low-income individuals who don’t make enough money to have to file tax returns and also don’t receive certain federal benefits.
“This is a hard population even in a normal time to reach. And when you have things shut down, it becomes even more difficult,” said Nina Olson, executive director of the Center for Taxpayer Rights who previously served as the national taxpayer advocate at the IRS.
She said many of the centers that provide tax assistance to low-income people have been closed because of the coronavirus.
Payments were automatically sent by Treasury to non-filers who receive Social Security, railroad retirement benefits, supplemental security income and veterans benefits, but not every non-filer receives benefits from those programs.
Treasury said that individuals who don’t normally file tax returns and haven’t yet received their coronavirus relief payment can use an IRS web tool to provide the agency with the necessary information to receive their payments. They also said that people who submit their information through the online portal by Oct. 15 will receive their payment by the end of the year.
The IRS said Wednesday that it is planning an extensive outreach campaign about the payments to groups that serve homeless individuals, households where members speak limited English and underserved communities.
The agency has not provided an estimate on how many people are waiting for their payment.
Chuck Marr, senior director of federal tax policy at the Center on Budget and Policy Priorities, said states should “take an active role” in helping non-filers who haven’t yet received their relief payments, since many of those who fall into this category are in regular contact with state offices through Medicaid and the Supplemental Nutrition Assistance Program.
Olson said some clinics that help low-income taxpayers may be reopening in the coming weeks and months, and the IRS should work with those centers in an effort to get low-income people their payments. She also recommended that as businesses reopen, the IRS should reopen its walk-in sites to help people who don’t typically file tax returns.
Non-filers aren’t the only people who haven’t received payments.
Treasury said people who have filed tax returns but haven’t received relief payments and think they’re eligible for one will be able to claim their payment when they file their 2020 tax return next year. Taxpayers can call the IRS if they need their payments sooner than next year.
Treasury officials also said that people who didn’t receive the full amount to which they are entitled, such as if they didn’t receive money for their dependent child, can also claim the additional amount when they file their 2020 tax returns.
Some of the issued payments have caused confusion for recipients.
For example, some people who recently received their payments by prepaid debit card have been skeptical about them and thought they were junk mail or a scam. Many taxpayers weren’t aware that payments were being delivered via debit cards, which are being mailed in plain envelopes from Money Network Cardholder Services, without any reference to Treasury or the IRS.
Treasury announced in mid-May that the cards were being sent to a group of taxpayers whose bank information was not on file with the IRS and whose tax returns had been processed by IRS service centers in Austin, Texas, and Andover, Mass. Mnuchin said at the time that the cards were designed to get payments to people quickly and securely.
Treasury spokeswoman Monica Crowley said on Twitter last week that people who lost or threw out their cards can call to get a free replacement.
Tax experts argue it was a smart move for Treasury to provide people with payments through prepaid debit cards, saying the cards can be more secure and get to people faster than paper checks. They’re also helpful for people who are unbanked or underbanked.
But experts also said Treasury and the IRS could have done a better job of communicating to the public how the cards would be arriving.
The cards are “a departure from how they typically provide refunds to folks,” said Laura Scherler, senior director of economic mobility at United Way Worldwide.
The payments have been going out even as much of the IRS’s workforce has been working remotely because of the pandemic.
The IRS said last month it was starting to add 3,500 telephone representatives to answer calls about payments. The agency plans to bring back more representatives when they can, based on state and local government work advisories.
But IRS watchers say there still aren’t enough people back at work sites to fully help people with the payment problems.
“There’s not a whole lot of infrastructure out there for special cases for folks who need to talk to a real live human being, either at the IRS or within the taxpayer advocate’s office, to figure out what’s going on,” said National Taxpayers Union President Pete Sepp.