June 30, 2020

Cardin, Wyden Lead Senate Finance Democrats Urging Treasury/IRS to Send Missed COVID Relief Payments to Non-filers with Dependents

WASHINGTON – U.S. Senators Ben Cardin (D-Md.), a senior member of the Senate Finance Committee, and Ron Wyden (D-Ore.), Ranking Member of the Senate Finance Committee, led committee colleagues in a letter Tuesday to Treasury Secretary Steven Mnuchin and Internal Revenue Service (IRS) Commissioner Charles Rettig calling on them to immediately distribute further supplemental economic impact payments to those who are in need rather than make them wait until tax time next year. In addition to Senators Cardin and Wyden, the letter was signed by Finance Committee members Tom Carper (D-Del.), Michael Bennet (D-Colo.), Maggie Hassan (D-N.H.) Bob Casey (D-Pa.), Robert Menendez (D-N.J.), Mark Warner (D-Va.), Maria Cantwell (D-Wash.), Sherrod Brown (D-Ohio), Sheldon Whitehouse (D-R.I.), Debbie Stabenow (D-Mich.), and Catherine Cortez Masto (D-Nev.).

“[Economic Impact Payment] recipients who may have eligible dependents, including Social Security retirement, disability, and RRB recipients, were given only 48 hours to access the Non-Filers Portal in order to receive the additional $500 payments for eligible dependents,” wrote the Senators. “Many of these Americans with dependents were not able to meet that deadline and have to wait until the 2020 tax filing season to receive these payments. These benefit recipients can be especially economically disadvantaged and are in need of these payments to help ease the economic burdens of the COVID-19 pandemic.

“We request that the IRS allow traditional non-filers with eligible dependents equal time and opportunity to access the Non-Filers Portal in order to claim their rightful dependent payments, in line with the supplemental payments being provided to those who made the initial short window for filing through the portal. If the IRS does not take these steps, economically vulnerable families will face further delays in receiving much-needed payments,” they added.

Under the CARES Act stimulus legislation passed by Congress in March, an Economic Impact Payment (EIP) of up to $1,200 per adult and $500 per dependent child went to most taxpayers with incomes below $75,000 for single taxpayers and $150,000 for married taxpayers. The payment is structured as an advanceable tax credit and administered by the Internal Revenue Service (IRS).

In most cases, the IRS was able to use existing tax returns to determine eligibility and release payments for eligible recipients and their dependents. For others, including those who traditionally do not file taxes, the IRS created a Non-Filers Portal tool designed to assist these non-filers in filing returns in order to receive payment for themselves and their dependents.

Senator Cardin has consistently advocated for the fast and automatic delivery of EIP to those receiving Social Security retirement, disability, Railroad Retirement Board, Veterans Affairs, or Supplemental Security Income benefits.

On Monday, National Taxpayer Advocate Erin M. Collins released a report to Congress identifying challenges facing taxpayers as a result of the COVID-19 pandemic. Included in this report is a recommendation that the IRS continue to allow individuals to file paper returns or use the Non-Filer tool to claim dependents and immediately issue supplemental economic impact payments instead of waiting until 2021. 

The full text of the letter follows and can be found at this link.

Dear Secretary Mnuchin and Commissioner Rettig:

Thank you for the work the Treasury Department and Internal Revenue Service (IRS) have done to distribute economic impact payments (EIP) during the COVID-19 pandemic and 2019 filing season. If not for the tireless work of federal employees, millions of Americans would be worse off. We write to request the Treasury and IRS take this opportunity to use existing tools to distribute further supplemental payments to those who are in need and not make them wait until tax time next year.

On March 27, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. This bipartisan law provides direct cash payments to individuals for financial assistance due to the COVID-19 pandemic’s effect on the economy. EIP provides up to $1,200 per eligible adult and up to an additional $500 in cash assistance per eligible dependent child. These economic payments were a critical component of the CARES Act to help families navigate this health and economic crisis.

In most cases, the IRS was able to use existing 2018 or 2019 tax returns to determine eligibility and release payments for eligible recipients and their dependents. For others, including those who traditionally do not file taxes, the IRS created a Non-Filers Portal tool designed to assist these non-filers in filing returns in order to receive payments.

In April, Treasury announced the EIP would be automatically sent to those receiving Social Security retirement, disability, Railroad Retirement Board (RRB), Veterans Affairs, or Supplemental Security Income benefits. However, for those recipients who may have eligible dependents, including Social Security retirement, disability, and RRB recipients, were given only 48 hours to access the Non-Filers Portal in order to receive the additional $500 payments for eligible dependents. Recipients of Veterans Affairs and Supplemental Security Income benefits were provided slightly more time, but it was still a truncated period within which to file.

Many of these Americans with dependents were not able to meet that deadline and have to wait until the 2020 tax filing season to receive these payments. These benefit recipients can be especially economically disadvantaged and are in need of these payments to help ease the economic burdens of the COVID-19 pandemic. 

On June 25, the Government Accountability Office released a report titled, “Opportunities to Improve Federal Response and Recovery Efforts.” This report indicated that from April 10 to May 17, 2020, the payments to as many as 450,000 traditional non-filers who used the Non-Filers Portal did not include additional $500 for eligible dependents. Further, the report stated that the IRS said it is working to identify and adjust the accounts and provide supplemental payments by the end of July 

While we appreciate the IRS taking action to provide supplemental dependent payments to these traditional non-filers, this action does not address those who were not able meet the truncated deadlines to claim dependents.

For those who were issued an EIP without the dependent amount, there is a clear solution. The IRS has announced it will keep the Non-Filers Portal open until October 15 for those who need to file through the portal and didn’t receive automatic payments. We request that the IRS allow traditional non-filers with eligible dependents equal time and opportunity to access the Non-Filers Portal in order to claim their rightful dependent payments, in line with the supplemental payments being provided to those who made the initial short window for filing through the portal.

If the IRS does not take these steps, economically vulnerable families will face further delays in receiving much-needed payments. With the IRS’s existing tools, the IRS can provide this relief.

We greatly appreciate the steps you have taken to ease the burden for traditional non-filers to receive needed economic impact payments. We also recognize the steps the IRS has taken to provide tools to help in this regard. Without these actions, many more Americans would have missed out until next year. However, with more economically vulnerable families left out, we request the IRS provide non-filers with dependents every opportunity to receive economic impact payments that they deserve.

 

Sincerely,

 

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