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New Nonfiler Tools Expected After Biden Executive Order

Posted on Jan. 25, 2021

Treasury pledged to implement new online tools for nonfiling taxpayers to claim overdue coronavirus economic impact payments (EIPs) in response to an executive order.

To carry out President Biden’s January 22 executive order on COVID-19 economic relief, Treasury will “expand and improve delivery of Economic Impact Payments including establishing online tools for claiming their payments, working to make sure that those who have not yet accessed their funds get the relief they deserve, and analyzing unserved households to inform additional outreach efforts,” according to a White House fact sheet.

In a separate fact sheet, Treasury acknowledged that as many as 8 million eligible households missed the first round of EIPs, issued in March 2020, and the department “will take steps designed to reach as many of these missed households as possible.”

House Ways and Means Committee Chair Richard E. Neal, D-Mass., endorsed the executive order in a statement: “Today’s action will encourage the Treasury Department to explore new strategies to ensure that outstanding money reaches people’s pockets.”

In addition to intensified outreach to nonfilers, and especially those with no or limited English proficiency, Treasury said it will work with the IRS to reissue unclaimed and possibly lost EIPs, or encourage those who didn’t get EIPs to claim them on their 2020 tax returns.

Room for Improvement 

The IRS and the Taxpayer Advocate Service didn’t respond to requests for comment on the executive order.

But former National Taxpayer Advocate Nina Olson told Tax Notes there’s plenty the IRS and Treasury can do to fulfill the order’s mandates.

For one thing, Olson said, the IRS still hasn’t committed to keeping the agency’s nonfiler portal open through the 2021 filing season and the remaining calendar year — although she added that the executive order has likely moved the tax agency to consider the option favorably.

Olson, now executive director of the Center for Taxpayer Rights, also said the IRS should use internal Form W-2 and 1099-MISC and 1099-NEC data to automatically pay taxpayers eligible for the childless worker earned income tax credit.

“The IRS needs to improve the [nonfiler portal] tool so that it’s not just used on the stimulus payments but on other payments that may very well be larger than the stimulus payment,” Olson said.

Olson also suggested that the IRS share household-level income data with local EIP outreach stakeholders to more precisely target potentially overlooked recipients. “The best outreach efforts are on the ground,” she said.

The Treasury fact sheet indicated that it planned research on ZIP codes with higher levels of nonpayment and on households with other government benefits.

Olson added, “I hope they look at the prison population.” Many incarcerated individuals got no assistance from the IRS in claiming EIPs for which they were eligible, and were hampered by federal, state, and local prison officials when trying to file paper tax returns to claim them, she said.

“It has been unconscionable that the federal government, and the IRS, denied these individuals their lawful payments, and fought them to the very end,” Olson said.

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