The voices of Tax Policy Center's researchers and staff
During last month’s Democratic presidential debate, moderator Gayle King asked the candidates what motto guided their lives. If Oprah’s best friend ever asks me, I would borrow a line from Mel Brooks: “Hope for the best, expect the worse.”
I hear that song in my head when I read about the plans to require the Internal Revenue Service to deliver payments to help as many as 150 million households deal with the coronavirus pandemic. The Trump Administration initially promised to send out payments in two weeks after Congress passes a bill. The Congressional plans try to lower expectations by calling for payments “as rapidly as possible,” but it probably is too late.
I hope the IRS can get those checks out speedily, but I expect—if not the worst—a lot of disappointed people who will have to wait months. And who will blame the agency for delays.
Don’t get me wrong, despite tremendous hurdles, the hard-working IRS staff delivered advance payments of tax rate reductions (2001) and child tax credits (2003) as well as stimulus payments (2008) in a timely fashion.
But timely is a relative term. Those first payments were made at least six weeks after Congress approved them—and often much later than that. In 2008, the gap between passage and the start-up of payments was about three months.
Why the delays? Computer programs must be developed and tested. Guidance must be drafted to fill in the holes left in legislation. Notices telling taxpayers when to expect checks must be written. The IRS website must be updated and telephone operators must be trained to deal with the expected deluge of questions from impatient taxpayers. Those are the challenges that the IRS faced before, and they help explain why prior payments were delayed.
In fact, that aforementioned six-week lag between enactment and delivery is a vast understatement of the time needed to implement stimulus payments. In 2001 and 2003, the IRS started work over three months before enactment. And while technology has undeniably improved since 2008 and more households use direct deposit to receive tax refunds and other government payments, those reasons for optimism should be tempered by experience.
Moreover, to quote Mel Brooks again, “the world’s a stage, we’re unrehearsed.” The IRS faces new challenges in 2020. One is the deep cuts in the IRS budget since the last round of stimulus payments, meaning a smaller workforce to oversee the payment process.
And this year’s challenges are unique (I hope). IRS employees are not immune from the coronavirus. Indeed, they may be at greater risk: They are often cramped into crowded workspaces, and many of them are old enough to retire.
The IRS already has taken steps to protect its workers and taxpayers from the coronavirus. Last week, all Taxpayer Assistance Centers were closed, face-to-face interactions were discontinued, and some field offices were shuttered. Now, the IRS is cutting staffing at facilities that provide service-critical missions—including return processing—and closing some facilities in response to states’ stay-at-home orders. All of that may slow distribution of the payments.
Delaying the deadline for filing tax returns will reduce the pressure on the IRS workforce, in addition to easing the burden on taxpayers. Remote access should also enable some workers to begin some, but surely not all, of the programming, preparation, and development work.
Still, in the face of the pandemic, it seems unrealistic to expect the IRS can do a much better job than in 2001, 2003, and 2008 in disbursing payments.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
J. David Ake/AP Photo