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IRS Coronavirus Stimulus Payment Efforts May Fall Short

Posted on Nov. 12, 2020

The IRS’s last-ditch effort to get economic impact payments (EIPs) to every eligible individual is exposing the agency's growing digital divide with taxpayers and nontaxpayers alike, according to low-income outreach groups. 

Low-income taxpayer clinics, volunteer income tax assistance (VITA) sites, the Taxpayer Advocate Service, the IRS Communications and Liaison Office, and numerous nontax organizations fanned out across the country for National EIP Registration Day November 10. It was the IRS’s final pitch to an estimated 9 million nonfilers who need to register for the COVID-19 pandemic stimulus payments by the November 21 deadline.

“This program taught us a lot about the gap between the rich and poor in New York and New Jersey, and how little it takes to make some people’s life a little better for a little while,” said Frank Agostino of Agostino & Associates PC.

The IRS outreach is welcome and needed, Agostino said. At the EIP campaign’s peak over the past week, Agostino said, he processed as many as 10 payment requests a day. Up to 150 volunteers — including 70 translators — showed up at a recent outreach event to locate homeless people and help them open bank accounts and register for EIPs online, he said.

Kelly McBride of Code for America Labs Inc. described how the nonprofit built the getyourrefund.org website to connect people through VITA services with EIPs and other federal benefits to which nonfilers who are wary of help from the federal government may be entitled. “VITA knows the community like nobody else, and is more likely to be respected there,” she said.

Jennifer Burdick of Community Legal Services of Philadelphia said that while the IRS’s email, website, and social media outreach is appreciated, it’s only part of the story. The IRS “is new to interacting with the nonfiling population. Many nonfilers do not know about EIP payments and will not raise their hand by contacting an LITC to assist them in getting it. [The] IRS needs to meet them where they are at,” she said.

Digital Outreach

The IRS’s electronic outreach relies heavily on tax and nontax advocacy groups to contact individuals who have been out of touch with the government for a long time, supporters told Tax Notes.

EIPs could be a lifeline for about 4,000 low-income aspiring homeowners — if they knew about them, said M.A. Sheehan of the Lower 9th Ward Homeownership Association in New Orleans.

Sheehan noted that 20 percent of African Americans in her association’s service area lack access to the internet, and another 20 percent have access only at libraries and other public spaces.

“It’s such a word-of-mouth community,” Sheehan said. “If you don’t reach the person you intended, you may reach somebody who does need help through them.”

There’s also a dearth of trust in government, according to Sheehan and Agostino.

“Many of these [EIP] taxpayers did not file tax returns and would not have spoken to someone from the IRS,” Agostino said. “When outreach is needed to nonfilers, the IRS personnel aren’t the ‘trusted advisers’ in the low-income and limited-English community that we are.”

Although IRS outreach has been primarily electronic and internet-based, Agostino said, “The personnel from IRS [Communications and Liaison] gave us more credibility by participating in outreach whenever asked.”

Former National Taxpayer Advocate Nina E. Olson said the IRS sent mail notices to as many nonfiling individuals as it could identify who were eligible for EIPs, and then followed up with a second mailing. She praised the agency’s multilingual outreach. “In this sense, the IRS is really embracing a much more proactive role,” she said.

Burdick said the IRS campaign hadn’t reached Community Legal Services, or Face to Face, another low-income and homeless advocacy group she works with. Sheehan said she was contacted by the Taxpayer Advocate Service after she complained about the lack of TAS contact in June, but said she hasn’t heard anything since.

Beyond Reach?

Most advocates praised the IRS’s stimulus outreach efforts. Agostino called the tax agency’s EIP materials “fabulous. . . . IRS outreach has been great, except for the problems associated with” the pandemic.

“I’ve been at the IRS for more than 20 years, and this work has been unprecedented, topping anything the agency has done during previous stimulus efforts,” Terry Lemons, IRS chief of communications and liaison, said in a November 5 IRS web post.

The IRS has worked with more than 2,800 private and public partners, developed more than 200 online materials in several languages, and posted about 100 FAQs for its EIP efforts during the pandemic, Lemons said.

In addition to Code for America, McBride said the IRS has established partnerships with Intuit Inc., which wrote code for the agency's EIP online nonfiler portal, and United Way, which operates the 211.org website and hotline to assist EIP claimants.

The IRS didn’t respond to repeated requests for the latest data on how many individuals still need to be contacted — Olson questioned treating the 9 million estimate “as if it is written in stone” — or how many people it has reached since announcing the national registration day on October 23.

It’s also unclear how many EIP-eligible individuals may be beyond the reach of the IRS campaign.

Low-income elderly or disabled people who haven’t filed tax returns, public housing tenants, and people unwilling or unable to access the internet may be outside the reach of the IRS’s technology-focused effort.

“Outreach isn’t enough for people claiming the EIP,” McBride said. Automated systems may close some or most of the stimulus payment gap, she said, but “what we’ve found in this pandemic situation is people just want to talk to someone, because this year has been so disorienting.”

The government is “just at the start of addressing the digital divide” between where people want to go and where the tax system wants to take them, Sheehan said. “This will build in importance.”

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