WASHINGTON – To put anti-war checks in the hands of millions of Americans, the US government relies on a tax agency with fewer workers, a smaller budget and the same systems. computer during the 1960’s was the last time it was asked to do so.
Exposed to budget cuts and hobbies of obsolete technology, the U.S. Internal Revenue Service has fought over the past decade. Audits fell and taxpayer service suffered, agency figures show.
Now Congress and the Trump administration are grappling with more jobs as they scramble to contain the collapse from the coronavirus, which threatens to bring the world’s largest economy to recession.
The U.S. Senate approved a massive stimulus bill on Wednesday that would provide payments of up to $ 1,200 to millions of Americans. It also includes a set of tax breaks for businesses and individuals. The Chamber is expected to pass it by Friday.
Treasury Secretary Steven Mnuchin said he wants the payments to come out in early April.
Experts say it’s likely to be months, not weeks, before those payments arrive. They said excessive activity activity could hurt the IRS’s ability to carry out other work tasks.
“This is the one agency that can do these things well. But it goes with everything that needs to be done,” said Nina E. Olson, who served as IRS Advocate Advisor from 2001 to 2019.
In addition to direct payments, the IRS will also require a new set of tax breaks for businesses and individuals included in the bill. The agency must also implement another set of business tax credits signed by President Donald Trump last week to provide paid leave to workers’ sick leave.
Mnuchin last week pushed the tax filing deadline for U.S. businesses and households on July 15 from April 15.
Economists say that direct payment is one of the most effective ways to generate economic activity because people who earn money tend to spend it fast.
In 2001, the IRS took more than six weeks to issue the first rebate authorized by President George W. Bush’s tax cuts. In 2008, the IRS issued its first payments to fight the Great Recession almost three months after Bush signed them.
Since then, the agency has suffered a decade of austerity. Its budget is 20% smaller when adjusted for inflation than the 2010 fiscal year, according to the advocate’s office. Staffing also fell by 20%, to 73,550 employees.
The IRS is struggling to find employees who can co-operate with the COBOL language under a computer system first established in 1968, according to the Office of Government Accountability.
Now it has to figure out how to staff its processing centers at a time when local authorities are urging people to stay home. On its website, the IRS requires taxpayers not to call hot lines with questions about direct payments.
The agency said last week that it is closing its 300-plus in-person help center but will continue to process tax returns and help taxpayers “as much as possible.”
“I don’t think any of the policy makers have considered the practical implications of actually doing it. The IRS doesn’t have the resources to do so,” said Howard Gleckman, a senior analyst at the Urban Institute’s Tax Policy Center.
Prior to IRS issues of payments, agents had to calculate the amount based on family income and status, and may not have current bank information for direct deposits or current addresses to issue physical checks. .
However, they will be helped by the fact that 89% of filings are made electronically in 2018, up from 58% in 2008.
At the end of the day, the IRS will withdraw the money, said Charles O. Rossotti, who headed the agency between 1997 and 2002.
“They won’t do it as fast as politicians want, and they will never be perfect,” he said. “But if they want to send $ 500 billion to 100 million people, they will.”
(Reporting by Andy Sullivan; Editing by Heather Timmons, Daniel Wallis and Dan Grebler)