Lawmakers urge IRS to fix stimulus payment problems

Over a hundred members of Congress are asking the Internal Revenue Service to resolve a number of issues preventing the remaining Economic Impact Payments from going out to taxpayers who desperately need the money as they struggle through the novel coronavirus pandemic.

The letter, signed by 111 lawmakers, was addressed Thursday to IRS Commissioner Chuck Rettig and urges him to deal with a number of issues, including delayed payments, long waits for paper returns to be processed, money erroneously going to deceased spouses and then being considered tax debts by the IRS, lack of information from the IRS’s “Get My Payment” tool, and direct deposits not being made.

The letter calls on the IRS to resolve these problems in a fair and timely manner and urges the agency to expand its capacity for casework assistance to Economic Impact Payments claims. At a hearing of the Senate Finance Committee earlier this month, a number of senators raised the issues in person with Rettig, and he pledged to fix them, while pointing out that the vast majority of stimulus payments had been delivered without these problems.

The payments were part of the CARES Act that Congress passed in March in response to the COVID-19 pandemic. While millions of Americans have received their payments, the lawmakers noted, some who are facing increased financial hardship because of COVID-19 are still waiting for them.

“While the IRS has made a good faith effort to provide timely and updated information on their website, our constituents continue to express their frustration that the information available does not provide enough clarification,” the bipartisan group of lawmakers wrote in the letter, which was spearheaded by Rep. Suzan DelBene, D-Washington, along with Denny Heck, D-Washington, Jackie Walorski, R-Indiana, and Cathy McMorris Rodgers, R-Washington. “Ultimately, we are concerned that the general information provided is not sufficient to address the unique and highly individualized situations that our constituents are facing.”

Among the problems still being reported, according to the letter, are:
• People who filed paper returns for 2019 are worried that the delay in processing paper returns, due to the closure of IRS facilities, is also delaying their payments. If they don’t have tax information on file for a previous year, they are encouraged not to re-enter their information into the IRS website, effectively putting them in limbo until their return is processed. The IRS hasn’t clarified when paper returns will ultimately be processed.
• Individuals with deceased spouses on record are having their EIP erroneously withheld, due to an error on the part of the Bureau of Fiscal Services that marked a “debt” on the late spouse’s record, rather than “deceased.” BFS admits to this mistake, but taxpayers have still found it difficult to resolve when access to a live technician via the IRS phone line is rare.
• Individuals have expressed confusion about the lack of information available from the IRS’s online “Get My Payment Tool.” The answer “Payment Status Not Available” that is generated for a payment that hasn’t yet been processed and mailed is the same answer that’s generated if a taxpayer is ineligible for a payment, but there’s no clarification about which scenario applies to the individual utilizing the tool.
• Taxpayers are also confused about why their payments aren’t being directly deposited in their bank accounts, even when the IRS has their direct deposit information on file. The IRS doesn’t provide clear information about how it’s making a determination on what payment method to use. That also applies to those individuals who have received prepaid cards instead of checks (many taxpayers threw out the prepaid debit cards since the envelopes looked like junk mail and didn’t say they came from the Treasury or the IRS).
• Individuals continue to have difficulty accessing the “Get My Payment” tool and are told the information they are entering doesn’t match IRS records despite every attempt to confirm the information they are inputting. There appears to be no recourse for individuals who can’t access this tool, and no indication why the information within the IRS’s system differs from the information the taxpayer is entering.