By David Lawder
WASHINGTON (Reuters) – With enough practice in sending coronavirus aid payments to Americans, the federal government should be able to launch the delivery of $ 1,400 checks almost immediately as soon as Congress finalizes the new aid bill and the president Joe Biden signing it, say tax experts.
Some Americans may see direct payments later this week if the bill passes the House of Representatives on Tuesday as expected, compared with the delay of several weeks in April 2020. Almost 160 million families are expected to receive payments, estimates the House White.
The Treasury Department’s IRS will have new challenges on its hands, however, thanks to the $ 1.9 trillion relief bill. Imprisoned people, those with non-citizens’ spouses and relatives of those who died in 2020 will be eligible for payments.
The account also includes an expanded child tax credit of up to $ 3,000 per child, paid monthly starting in July, essentially forcing the revenue collector to act as a benefit administrator for the rest of the year.
The IRS, which has more than 70,000 employees, handles more than 190 million individual and corporate tax returns a year, but has been hampered by budget cuts and outdated technology in recent years. The COVID-19 account includes $ 1.46 billion for the agency, which is entering its busiest season, with the April 15 deadline approaching for individual taxpayers approaching.
A US Treasury spokeswoman said the Biden government’s priority was to accelerate relief for Americans, adding: “The Treasury is ready to implement the direct paycheck program as soon as the American Redemption Plan is approved.”
FINDING THE DISCONNECTED
Making one-time payments to those who regularly file tax returns should not be a struggle for the IRS, said Janet Holtzblatt, senior member of Urban-Brookings Tax Policy Center.
“They have already solved many of the problems that have delayed previous releases,” said Holtzblatt. “The IRS continues to surprise me in its ability to meet these challenges.”
It took more than two weeks for the IRS to start sending the first $ 1,200 electronic payments to taxpayers in April 2020, after then President Donald Trump signed the $ 2.2 trillion CARES Act on March 27. There was a delay of more than three weeks for paper checks, after changes were made to print Trump’s name on them.
The $ 900 billion end-of-year stimulus was signed by Trump on December 27, a week after Congress approved it. The IRS started sending electronic payments two days later, on December 29.
Biden left plenty of room for the IRS after Senate approval on Saturday, saying his plan “would release checks this month”.
But Democrats in Congress, including Senator Bob Casey, were more optimistic on Sunday. Payments will come out “in a very short time,” said Casey. “The Treasury Department is prepared for this. They have been dealing with this issue since last March.”
Another important priority for the next round will be to enroll more people for electronic payments, including those who earn little to file tax returns or who do not receive other federal benefits, who were left out of previous payment rounds.
Homeless people and people without access to the Internet will be difficult to reach, but Holtzblatt said that community groups that were closed last spring due to the coronavirus may now provide some help in signing them up.
The changes in the Child Tax Credit are a vast undertaking, say tax experts. All taxpayers who earn less than $ 200,000 with children under 17 who live with them for at least half of the year can claim full credit.
The Biden account increases the credit from $ 2,000 to $ 3,000 per child and allows it to be paid in advance for all income levels, such as monthly cash payments from July to December this year.
Nina Olson, executive director of the Center for Taxpayer Rights in Washington and an advocate for the national taxpayer from the IRS from 2001 to 2019, said that an important challenge would be to determine whether the children actually lived with their parents, which could delay payments.
The IRS also needs to change its culture to reflect a changing mission, she said.
“The IRS needs to recognize that it is not just a revenue collector, but a social benefits administrator, and it needs to form a team and organize its training accordingly,” said Olson.
(Reporting by David Lawder, additional reporting by Andrea Shalal; Editing by Heather Timmons and Peter Cooney)