WASHINGTON – Secretary of the Treasury Steven Mnuchin promises that millions of Americans will receive $ 1,200 stimulus checks in just two weeks, but some tax officials and congressional officials warn that it could take much longer.
Outdated technology and staff reductions at the Internal Revenue Service have severely hampered the agency’s ability to process checks in such a short time and could lead to delays in sending money to anxious Americans who count on the money to get through them in the difficult times caused by the coronavirus pandemic, experts say.
“There are going to be a lot of people for whom this is going to take a while, and I think it is going to be measured in terms of months, not weeks,” said Howard Gleckman, senior tax policy researcher at the Institute urban. Center.
Checks arrive:Mnuchin promises stimulus checks for many in 2 weeks after Democrats warn it could take months
Mnuchin dismissed the concerns at a White House press conference on Thursday, telling reporters that the IRS would start sending money to many Americans by direct deposit in just two weeks. Checks will be mailed to Americans who have not provided their banking information to the IRS.
“I don’t know where you hear these things,” said Mnuchin of possible delays. “This money is useless to people if it appears in four months, and we will keep that promise (two weeks). “
The checks are part of a $ 2.2 trillion economic stimulus package that President Donald Trump signed last week to provide a quick infusion of money to Americans financially affected by the coronavirus crisis. The stimulus package also includes loans, grants and tax breaks for businesses, also in shock from the economic fallout caused by the pandemic.
But the Trump administration’s quick schedule to deliver stimulus checks to Americans once again draws attention to aging technology and other problems that have clouded the IRS for years – problems that will pose a serious challenge to the agency as it strives to respond. the delivery time of the check.
The Treasury Department insists that 50 to 70 million Americans will receive their payments by direct deposit by April 15, and that most eligible people will receive their checks within three weeks. Americans whose bank account information is not currently in the government system may have to wait longer, says the Treasury.
But a memo circulated by House Democrats on Thursday warned that some Americans may have to wait up to 20 weeks – or five months – before receiving their checks.
“I don’t want to underestimate what the IRS can do,” said Nina Olson, former IRS taxpayer advocate. “I think it is under enormous pressure to withdraw these checks as soon as possible. “
The IRS will likely be able to withdraw checks in three to four weeks, said Olson, who is now executive director of the Nonprofit Center for Taxpayer Rights. “But I don’t think everyone should expect that time,” she said. “And it will take a while to get a bunch of these checks.”
Pressures from the IRS are compounded by personnel problems – the agency’s workforce has shrunk by 20% over the past decade – and the limitations caused by its aging tax system.
The IRS’s information technology systems are among the oldest in the federal government. Two of its database systems – a master file that contains the records of all taxpayers and another that contains the records of business tax accounts – date back to the 1960s.
Olson and others have warned for years that the IRS does not have the technology it needs to do its job. The agency has tried to correct the problems by overlapping smaller systems and applications on its old systems, but this has often created new problems because not all computer programs can speak to each other.
“The IRS has erected a 50-story office building on top of a creaky 60-year foundation, and it adds a few more floors each year,” Olson wrote in his report to Congress Taxpayer Advocate l ‘last year. “There are inherent limitations to the functionality of a 60-year-old infrastructure, and at some point the whole building is likely to collapse. “
A dramatic example of the limits of the system occurred two years ago, when IRS computers were overwhelmed and crashed as millions of Americans attempted to file and make payments on business day. ‘tax. The agency was forced to give taxpayers an extra day to file and pay their taxes.
To help process stimulus checks, the IRS said it would create a web portal so that Americans who have not previously provided their direct deposit information to the government can do so online. But Gleckman wondered how quickly the agency would be able to set up such a portal.
The IRS did not respond to questions regarding the construction of the gate or the hiring of a contractor to perform the work. But, “if they want to try to build it, there is now a way to build this thing in a week,” said Gleckman.
Many taxpayers did not see a check for months when the government authorized stimulus discounts during the Great Recession of 2008. At the time, only 60% of taxpayers filed electronically. Almost 90% of all taxpayers file their tax returns electronically today, which should make it easier for the IRS to deliver their checks, said Gleckman.
But when it comes to paper checks, the IRS is limited in the number it can process in a given week, said Garrett Watson, economist at the Nonprofit Tax Foundation.
“This is due in part to outdated technology,” said Watson, “but is also motivated by the fact that the IRS does not have a smooth process for quickly sending tens of millions of discounts in just a few weeks. ”
Olson said taxpayers deserve a more detailed explanation of when they can expect to receive checks.
“I fear the IRS will not be allowed to say this because the administration wants people to have some hope that the check will be in the mail, even if it is not,” a- she declared.
Michael Collins covers the White House. Join him on Twitter @mcollinsNEWS.
Who is eligible ?:Coronavirus stimulation package: who will receive $ 1,200 checks and when will it be sent?