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Coronavirus Relief Bill Is A 'Heavy Lift' For Already-Strained IRS

The Internal Revenue Service is pictured in April 2020 in Washington, D.C. The IRS has faced huge challenges in recent years, and new coronavirus relief bills introduce new complexity to the agency's work.
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The Internal Revenue Service is pictured in April 2020 in Washington, D.C. The IRS has faced huge challenges in recent years, and new coronavirus relief bills introduce new complexity to the agency's work.

You might want to check your bank account this weekend.

The Biden administration says the first of the $1,400 direct payments, part of the big coronavirus relief package the president signed on Thursday, were set to go out to eligible Americans over the weekend.

The Internal Revenue Service has the job of implementing the measure, and they've had a rough decade or so. Budgets were slashed, there was a hiring freeze and a loss of workers. Still, the work keeps coming.

Tony Reardon, president of the National Treasury Employees Union, which represents many IRS workers, tells NPR that since 2010 the agency has lost nearly 33,000 employees.

"It makes it very difficult for the agency to do its tax work when they've lost more than 20% of their workforce," he says.

Then a year ago, the coronavirus pandemic hit. Some IRS offices temporarily closed, the filing deadline for 2019 taxes was extended to July, and the IRS is still behind in processing those returns.

And now, with the 2020 filing season underway, the agency has new responsibilities. It needs to issue the latest stimulus payments to some 85% of American households, according to President Biden, and implement other provisions as well.

"It is a big task on top of filing season as well as the other stimulus measures that were put in place by the bill," says Samantha Jacoby, senior tax legal analyst at the nonprofit Center on Budget and Policy Priorities.

Jacoby says the IRS will get some help in the bill, an infusion of $1.4 billion, to modernize the agency's 50-year-old software platform.

She says the IRS knows "how big of a task this is and how important it is. And they've got this big infusion of funding, which is really important."

"There could be some hiccups," she cautions, "but the IRS is working really hard to try to get this relief to people."

The IRS says it's still reviewing the just-passed bill. A spokesman told NPR the measure is "a really heavy lift" in some respects.

Nina Olson, a former taxpayer advocate at the agency, says the IRS should be pretty well-prepared to issue the stimulus payments.

"I think that the stimulus checks are the least of their worries in the sense that they've done this twice for the last 12 months, they have the programming in place for most of it," she says. "Certainly with the December round, they showed how quickly they could respond."

But Olson says another provision of the measure could be a bit more complicated. It's the new, monthly, child tax credit of up to $300 per child that Democrats included in the bill, which the IRS is going to have to figure out how to implement.

"It's a new program. It requires monthly payments," and she says ensuring the money gets into the right hands is the biggest issue. She says "if the child is moved to somebody else's household or another child is added," it makes the IRS' task complex.

Another provision in the bill, which makes the first $10,200 in unemployment insurance payments tax-exempt for many Americans, is a further complication.

Many taxpayers have already filed their 2020 returns and may have paid taxes they no longer owe, says Jacoby.

"The good news is starting last year, the IRS will now allow people who want to amend returns to do so electronically, which wasn't the case in the past. And that might make it a little bit easier for some people."

But she says it's clearly "a big challenge" for the IRS to carry out all that has been put on its plate with the new legislation, and it's going to take some time for the agency to come with procedures to carry it out.

Copyright 2023 NPR. To see more, visit https://www.npr.org.

NPR News' Brian Naylor is a correspondent on the Washington Desk. In this role, he covers politics and federal agencies.