Coronavirus

IRS Could Take Months To Send Out Stimulus Checks

IRS, stimulus, coronavirus, relief, taxpayers

As the U.S. reels from the coronavirus pandemic and people await relief checks from the government, former IRS officials say it could be months before anyone gets that much-needed money, Reuters reported on Thursday (March 26).

Shackled by ancient computers and relentless staff cutbacks, the country’s revenue service has been struggling for more than 10 years. Even if it wanted to hire more staff, few prospective employees know the COBOL language that powers its computer system. The system was originally set up in 1968, according to the Government Accountability Office.

“It is the one agency that can do this stuff well. But that’s at the harm of everything else it’s supposed to do,” said Nina E. Olson, who served as the IRS’s national taxpayer advocate from 2001 to 2019.

The agency is shutting in-person assistance centers that staff over 300 people, it said last week, adding it would still process tax returns “to the greatest extent possible.”

“I don’t think any of the policymakers have given any thought to the practical implications of actually doing this. The IRS doesn’t have the resources to do it,” Howard Gleckman, a senior analyst at the Urban Institute’s Tax Policy Center, told Reuters.

The IRS has a budget and workforce that is 20 percent smaller than it was 10 years ago, according to the advocate’s office. Some 73,550 people work for the IRS.

The agency also doesn’t have an updated list of household information like income and family size, former officials told Bloomberg. In 2008-09, the IRS took two months to send rebate checks to people. 

“The IRS may be able to handle payments that quickly for a smaller number of payments, but for that many millions it will require special handling,” Mark Everson, IRS commissioner from 2003-07, told Bloomberg.

President Trump said in a press conference on Wednesday (March 25) that he wanted direct payments to people by April 6. Adults making up to $75,000 are slated to get $1,200 plus $500 for each child. Qualifying income levels will be based on 2019 federal tax returns, if already filed, or on 2018 returns.

“You have to accept that there is going to be a bunch of errors,” said Mark Mazur, a former IRS and Treasury Department official. “To do this instantaneously is an aspirational goal.”

Washington officials reached an agreement Wednesday (March 25) for a $2 trillion bill to rescue the economy amid the coronavirus pandemic, the largest economic stimulus package in American history. 

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