As millions of Americans await the $1,200 cash payments authorized by the latest coronavirus stimulus package, experts and progressive advocates are condemning a move by the Trump administration which would force millions of seniors, veterans, and people with disabilities to jump through unnecessary hoops to receive money they are entitled to under law.
The Internal Revenue Service issued guidance earlier this week announcing that people who do not typically file a tax return—a group that includes millions of Social Security recipients and low-income Americans—"will need to file a simple tax return to receive an economic impact payment."
"This is outrageous," Nancy Altman, president of advocacy group Social Security Works, said in a statement on the policy Wednesday. "The $1200 payments could easily be added automatically to the benefits these people already receive every month."
"Instead, the Trump administration is throwing up an unnecessary barrier that will make it harder for seniors, people with disabilities, and veterans to get the payments they desperately need," said Altman. "In the middle of a pandemic to which they are most vulnerable, the groups can't afford any delay."
Altman noted that the Coronavirus Aid, Relief, and Economic Security (CARES) Act explicitly gives the Treasury Department authority to use Social Security Administration (SSA) data already on file to distribute the one-time payments to those who did not file a tax return in 2018 or 2019.
Chuck Marr, senior director of federal tax policy at the Center on Budget and Policy Priorities, urged the Treasury Department to "aggressively use that authority" to ensure that seniors and other vulnerable people don't fall through the cracks.
"Requiring seniors and people with disabilities who receive Form SSA-1099 (the annual Social Security benefit statement) to file a tax return is unnecessary," Marr wrote in a blog post-Tuesday. "The federal government already has all of the information it needs... Likely more than 15 million Social Security recipients who currently don't file tax returns and aren't otherwise required to do so would have to file if Treasury doesn't use its authority to get those people payments automatically."
HuffPost's Arthur Delaney reported Tuesday that what the IRS described as a "simple tax return" is anything but simple to actually file, particularly at a time when volunteer tax clinics that help Americans navigate the process are closed due to the coronavirus outbreak.
As Delaney wrote:
Theoretically, any low-income household should be able to file its taxes online for free (here is the IRS.gov page with links to approved free services). But new filers trying to get rebate payments through the free online process may have some problems.
One person in Indiana, who said their only income is disability benefits, said the free online tax software wouldn't allow them to file online or enter bank account information. The person, who requested anonymity, had received too little in disability benefits to owe federal tax, and because they had no earned income, wouldn't receive a normal refund, so the filing software said they weren't eligible to file online.
I created a TurboTax account and tried to make a dummy return for a single person with no earned income. The software said that because my Form 1040 would have zeroes on lines for income, tax, credits, and payments, that my federal return was "ineligible for e-filing, according to IRS rules."
After publishing his story, Delaney tweeted that he received "a dozen emails overnight from seniors on Social Security unable to file taxes online because the tax prep software won't let them, apparently due to their lack of earned income and tax liability."
"This is a problem!" Delaney said.
House Democrats said they have heard similar complaints from their constituents.
In a statement Tuesday in the wake of the IRS guidance, House Ways and Means chairman Rep. Richard Neal (D-Mass.) said he and other Democrats in Congress "have been inundated with calls from concerned senior citizens regarding their ability to receive the economic impact payments Congress included in the CARES Act."
"Crucial filing resources, like Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE), are not available to provide assistance due to the COVID-19 crisis," said Neal. "My colleagues and I strongly urge Treasury Secretary [Steve] Mnuchin and Social Security Administrator [Andrew] Saul to find a solution that will allow vulnerable groups to receive these funds automatically, without needing to file an additional return."
Mnuchin said a Sunday morning appearance on CBS' "Face the Nation" that Americans with direct deposit information on file with the IRS can expect to receive their one-time payments automatically "within three weeks," but the Washington Post reported Wednesday that "technical glitches and mismanagement" could disrupt that timeline.
Millions of Americans without direct deposit information on file with the IRS could face months of delays in receiving their payments, House Democratic aides have warned.
The cash payments are phased out for Americans with higher incomes; individuals earning up to $75,000 a year are eligible for the maximum amount of $1,200.
Altman of Social Security Works said that to ensure that everyone who is eligible receives their payment, the Trump administration must roll back its requirement that many seniors and other vulnerable Americans file a return.
"Millions of people who need these payments won't get them [if the policy remains in place]," Altman said. "At best, the payments will be delayed—even though the federal government pays these people benefits right now, each and every month."
"The Trump administration must reverse course immediately and make a clear public statement that all Social Security beneficiaries, SSI recipients, and veterans receiving pensions will get their $1200 payments without filing a tax return," said Altman. "And then the government should pay—without delay—what it owes."