President Joe Biden's $1.9 trillion COVID-19 recovery proposal, dubbed the American Rescue Plan, includes among other things a third economic impact payment (EIP).
This next payment is $1,400 for individuals earning less than $75,000 or $150,000 for a married couple filing a joint return. That would bring the $600 second EIP to the much-touted $2,000 total.
And as with the other two payments, the Internal Revenue Service again will be in charge of getting the money out to eligible recipients.
I know. Some of y'all are freaking out. You had issues getting your first EIP authorized by the Coronavirus Aid, Relief and Economic Security (CARES) Act back on March 27, 2020. Or you're still waiting on the second one that was part of the federal spending bill (and more) that became law on Dec. 27, 2020.
Potential calendar complications: And the timing of COVID-19 EIP #3 means it will be competing with IRS resources in a delayed 2021 tax-filing season.
The IRS will start accepting and processing 2020 tax returns on Feb. 12. House Speaker Nancy Pelosi reportedly will bring Biden's bill to that chamber's floor the week of Feb. 1, meaning it could make it through the House and Senate and be on the new president's desk by late February or early March.
Coronavirus crossover concern: When the IRS got the previous two COVID-19 distribution duties, last year's Tax Day was pushed to July 15. That gave the agency several months to do the dual jobs of handling tax returns and sending out relief money.
But it also meant that the IRS had to do both jobs with adjusting its services to protect employees and taxpayers.
If the projected timing of EIP #3 holds, the IRS will be dealing with folks claiming amounts from the first two coronavirus payments that they didn't get but now qualify for based on 2020 income as well as sending out the third payment.
Then there will be the folks who just want to complete their basic annual filing duties.
So yes, there is good reason for some worry. There's also good reason to cut IRS personnel who, like many of us, are still trying to shift to getting back to work in actual offices, some slack.
Prepping for taxes and EIPs: IRS Commissioner Chuck Rettig commended those agency workers, as well as discussed the upcoming tax season and COVID-19 issues, in a Jan. 21 online conversation with The Urban-Brookings Tax Policy Center (TPC), led by TPC Senior Fellow Howard Gleckman.
A quick preface of the video call. My overall observation when watching it live was that Rettig seems to really like his job, respects his staff and wants to make the agency better for them and taxpayers.
That attitude came through in the commissioner's generally optimistic take on continuing COVID-19 challenges, both health and financial, as the new filing season nears.
IRS now up to speed: "We actually are current. All returns are now in processing," said the commissioner of 2019 filings.
"At the end of June , we had 23.4 million unopened pieces of mail," Rettig said. "We went into fiscal 21 [Oct. 1, 2020] with a few million unopened pieces. Now we are not too far off where we would we be in a non-pandemic year."
The whittling down of the 2020 filing season backlog offers some hope that when the third round of coronavirus relief payments are ready to go, the IRS can use its prior experiences to help integrate the EIP #3 job into the current filing season duties.
Support for IRS rank and file: Rettig praised IRS staff for clearing the COVID-19 created backlog by the end of the year.
"I am very, very proud of IRS employees and how they've handled the pandemic," said Rettig, echoing the agency's fiscal year 2020 annual report.
He also took responsibility for how the IRS is dealing with COVID-19. "I am the guy who shut down 511 facilities around the world," he said, while the agency tried to figure out workable pandemic steps.
The IRS, he said, was among the leader in federal agencies in paying attention to the pandemic and its effects on its employees and services to the public. That leadership included a major shift to telework.
Rettig said 82 percent of staff were telework eligible at the beginning of pandemic precautions. Now, he said, 72 percent currently are teleworking. The transition took training in a virtual environment while implementing security protocols and addressing equipment issues.
Post-COVID changes: The coronavirus-created operational changes actually moved the IRS forward in some areas, noted Rettig.
Acceptance of digital signatures has significantly expanded, he said, adding that he is trying to get the agency into an even more digital environment.
The digital shift posed certain risks in what Rettig characterized as "a very risk averse agency, but under COVID, we had to get there." But the goal now, he said, is to retain some of the virtual changes the IRS made during the pandemic even after things return to more normal operations. "We are a reflection of the private sector in that regard," he said.
Making sure no one is left out: Rettig did acknowledge, however, that such digital shifts require the IRS to be aware of underserved communities.
Low–income taxpayers tend to be without bank accounts needed to complete or make easier many tax transactions. Many rural areas lack reliable broadband needed to interact with the IRS online. There actually are people who do not own smart phones.
On top of all that, Rettig noted that first language of millions of taxpayers is not English. He said that when he came on board in 2018, the IRS offer tax material in six languages, with English being one of those six. Now it offers 350 translation services to taxpayers.
Few are fluent in tax regardless of the language, he said. "We the IRS, as well as we the U.S. government, need to show we are here for them," Rettig said.
And showing the IRS is here for them, for all of us, will mean getting our 2020 returns processed while also delivering the next COVID-19 economic relief payment. For all our sakes, the IRS included, let's keep our fingers crossed that will happen and happen smoothly.
You also might find these items of interest:
- Digital IRS is costing those who can least afford it
- Slow tax refunds again make the annual Top 10 list of taxpayer problems
- In the wake of disasters & COVID-19, will the IRS be ready for the 2021 tax season?
|Coronavirus Caveat & More Information
In 2020, we're all dealing with extraordinary circumstances,
both in our daily lives and when it comes to our taxes.
The COVID-19 pandemic and efforts to reduce its transmission
and protect ourselves and our families means that,
for the most part, we're focusing on just getting through these trying days.
But life as we knew it before the coronavirus will return,
along with our mundane tax matters.
Here's hoping that happens soon!
In the meantime, you can find more on the virus and its effects on our taxes
by clicking Coronavirus (COVID-19) and Taxes.