Stimulus Checks: Direct Payments to Individuals during the COVID-19 Pandemic (GAO-22-106044)
Summary
U.S. Government Accountability Office Snapshot, Stimulus Checks: Direct Payments to Individuals during the COVID-19 Pandemic, GAO-22-106044, June 2022. The Snapshot states that IRS and Treasury issued $931 billion in direct payments to individuals from April 2020 to December 2021, and that three rounds of Economic Impact Payments (EIP) went to around 165 million Americans. It says some eligible Americans never received payments, particularly nonfilers, and that GAO recommended Treasury and IRS use available data to develop an updated estimate of total eligible individuals to tailor their outreach and communications efforts for similar tax credits.
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“Stimulus Checks: Direct Payments to Individuals during the COVID-19 Pandemic (GAO-22-106044).”
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U.S. GOVERNMENT
ACCOUNTABILITY OFFICE
Snapshot
Stimulus Checks: Direct Payments to Individuals during the
COVID-19 Pandemic
GAO-22-106044 • June 2022
In 2020 and 2021, IRS and Treasury issued $931 billion in direct payments to individuals to ease financial
stress due to the COVID-19 pandemic. However, some eligible Americans never received payments. We made
recommendations to strengthen Treasury and IRS’s outreach and communications efforts for the billions of
dollars in similar tax credits IRS administers, such as the Earned Income Tax Credit.
The Big Picture Refundable tax credits sometimes have issues with
improper payments (payments made in the wrong
From April 2020 to December 2021, the federal amount or to the wrong person). In September 2020,
government made direct payments to individuals we reported that the EIP improper payment rate was
totaling $931 billion to address pandemic-related around 2% and IRS took some actions to recover those
financial stress. The CARES Act, the Consolidated payments. More recently, Treasury’s Inspector General
Appropriations Act, 2021, and the American Rescue for Tax Administration (TIGTA) reported on additional
Plan Act of 2021 (Public Laws 116-136, 116-260, steps IRS should take to recover improper payments.
and 117-2, respectively) authorized three rounds of
Economic Impact Payments (EIP) that went to around
165 million Americans. What GAO’s Work Shows
1. IRS can use data to tailor outreach efforts.
The American Rescue Plan Act of 2021 also temporarily
expanded the eligibility of the Child Tax Credit (CTC) It was challenging for IRS and Treasury to get payments
to more families and increased the payment amounts. to some people—especially nonfilers, or those who
From July to December 2021, eligible families received are not required to file tax returns. These people were
advance monthly payments of half their total expected eligible for the payments for a couple reasons:
CTC, benefiting around 84% of children in the US.
• first, there was no earned income requirement, so
According to Census Bureau and Federal Reserve Americans with no or little income could receive
assessments of survey data, the EIPs and advance economic relief; and
CTC payments reduced financial hardship and food
• second, the payments were refundable tax credits,
insufficiency among recipients.
so eligible individuals can claim the full amount even
These pandemic-related payments to individuals if it exceeds what they owe in taxes.
far exceeded other stimulus payments made to
In 2020, Treasury and IRS used other data to identify
individuals in recent history.
and reach out to around 9 million potentially eligible
Stimulus payments to individuals in 2001, 2008-2009, and 2020-2021 nonfilers. In May 2021, TIGTA identified potentially 10
Dollars (in billions) million individuals eligible for payments, but IRS has no
1,000 $931 further plans to reach out to these individuals.
$93.5
750 Total » We recommended that Treasury and IRS use
Advance available data to develop an updated estimate of
500 CTC total eligible individuals which they could use to
$837.5 better tailor and redirect their ongoing outreach and
250 $108.4 communications efforts for similar tax credits.
Total EIP
$36.4
0
2001 2008-2009 2020-2021
Source: GAO analysis of IRS, Bureau of the Fiscal Service, and Joint Committee
on Taxation data. | GAO-22-106044
GAO-22-106044 Stimulus Checks: Direct Payments to Individuals during the COVID-19 Pandemic
2. Improved collaboration will also help outreach Timeline of Stimulus Payments to Individuals, 2020-2021
to underserved communities. 2020
Treasury and IRS undertook sweeping communications
March 13
and outreach efforts to publicize the EIPs and the U.S. declares !
advance CTC. For example, they expanded their COVID-19 a
March 27 national emergency
partnerships to educate more people about the CARES Act authorized EIP 1
stimulus payments. However, they can do more to
measure the effectiveness of their outreach. April 10
EIP 1 begins issuance
We found that underserved communities such as • Up to $1,200/adult and
nonfilers, first-time filers, unbanked/underbanked, $500/child
mixed immigrant status families, those with limited • 168.2 million payments
December 27 totaling $280 billion
internet access, and those experiencing homelessness Consolidated Appropriations
were likely to experience difficulties with receiving Act, 2021 authorized EIP 2 December 29
timely payments. EIP 2 begins issuance
• Up to $600/person
» We recommended that Treasury and IRS focus on • 152.4 million payments
totaling $147.9 billion
improving interagency collaboration and use data to
assess the effectiveness of their efforts to educate 2021
more people about refundable tax credits and March 11
eligibility requirements. American Rescue Plan Act
of 2021 authorized EIP 3 March 17
and Advance Child Tax EIP 3 begins issuance
Conclusions Credit payments • Up to $1,400/person
• 175.8 million payments
• Eligible individuals can still claim their payments totaling $409.6 billion
through October 17. Individuals who think they may $
be eligible but did not receive the third EIP or CTC
can request an extension and file a simplified return $ July 15
Advance Child Tax Credit
at ChildTaxCredit.gov. payments begin
• Up to $250-300/child
• Lessons learned can help IRS administer (monthly)
refundable tax credits. Although no new EIP and • 216.8 payments totaling
$93.5 billion
advance CTC payments are underway, Treasury and
IRS administer billions of dollars in refundable tax
credits annually. Lessons learned from the EIP and End of advance payments
advance CTC outreach efforts can help Treasury and *Full tax credit amounts can be claimed during the 2022 filing season
IRS manage other refundable tax credits such as the
Source: GAO analysis of legislation and IRS and Bureau of the Fiscal Service data. |
Earned Income Tax Credit. These payments are an GAO-22-106044
economic lifeline for many but also raise concerns
about improper payments. More from GAO’s Portfolio
• IRS’s new Taxpayer Experience Office can Economic Impact Payments and Advance Child Tax
help improve outreach. IRS recently established Credit Payments: GAO-22-105397 (April 2022),
the Taxpayer Experience Office to help drive the GAO-22-105051 (Oct 2021), GAO-21-551
agency’s strategic direction for improving the
(July 2021), GAO-21-387 (March 2021), GAO-21-265
taxpayer experience. This is an opportunity for IRS to
implement our recommendations to improve outreach (Jan 2021), GAO-21-191 (Nov 2020), GAO-20-701
efforts to individuals eligible for refundable tax credits. (Sep 2020), GAO-20-625 (June 2020)
About GAO Contact Us
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investigative arm of Congress, exists to support Congress in meeting its
Chuck Young, Managing Director, Public Affairs,YoungC1@gao.gov,
constitutional responsibilities and to help improve the performance and
(202) 512-4800
accountability of the federal government for the American people. This
document is based on GAO audit products. Contributors: Jay McTigue (Director), Jessica Nierenberg (Assistant
Director), Marybeth Acac (Analyst-in-Charge), Robert Gebhart, Matthew
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GAO-22-106044 Stimulus Checks: Direct Payments to Individuals during the COVID-19 Pandemic
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