Full text
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
to underserved communities.
Treasury and IRS undertook sweeping communications
and outreach efforts to publicize the EIPs and the
advance CTC. For example, they expanded their
partnerships to educate more people about the
stimulus payments. However, they can do more to
measure the effectiveness of their outreach.
We found that underserved communities such as
nonfilers, first-time filers, unbanked/underbanked,
mixed immigrant status families, those with limited
internet access, and those experiencing homelessness
were likely to experience difficulties with receiving
timely payments.
» We recommended that Treasury and IRS focus on
improving interagency collaboration and use data to
assess the effectiveness of their efforts to educate
more people about refundable tax credits and
eligibility requirements.
Conclusions
¢ Eligible individuals can still claim their payments
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
at ChildTaxCredit.gov.
¢ Lessons learned can help IRS administer
refundable tax credits. Although no new EIP and
advance CTC payments are underway, Treasury and
IRS administer billions of dollars in refundable tax
credits annually. Lessons learned from the EIP and
advance CTC outreach efforts can help Treasury and
IRS manage other refundable tax credits such as the
Earned Income Tax Credit. These payments are an
economic lifeline for many but also raise concerns
about improper payments.
¢ IRS’s new Taxpayer Experience Office can
help improve outreach. IRS recently established
the Taxpayer Experience Office to help drive the
agency’s strategic direction for improving the
taxpayer experience. This is an opportunity for IRS to
implement our recommendations to improve outreach
efforts to individuals eligible for refundable tax credits.
Timeline of Stimulus Payments to Individuals, 2020-2021
March 13
U.S. declares
COVID-19 a
March 27 national emergency
CARES Act authorized EIP 1
April 10
EIP 1 begins issuance
* Up to $1,200/adult and
$500/child
* 168.2 million payments
December 27 totaling $280 billion
Consolidated Appropriations
Act, 2021 authorized EIP 2 December 29
EIP 2 begins issuance
* Up to $600/person
* 152.4 million payments
totaling $147.9 billion
March 11
American Rescue Plan Act
of 2021 authorized EIP 3
and Advance Child Tax
Credit payments
March 17
EIP 3 begins issuance
* Up to $1,400/person
* 175.8 million payments
totaling $409.6 billion
O— July 15
Advance Child Tax Credit
payments begin
* Up to $250-300/child
(monthly)
* 216.8 payments totaling
$93.5 billion
December 31
End of advance payments
*Full tax credit amounts can be claimed during the 2022 filing season
Source: GAO analysis of legislation and IRS and Bureau of the Fiscal Service data. |
GAO-22-106044
More from GAO’s Portfolio
Economic Impact Payments and Advance Child Tax
Credit Payments: GAO-22-105397 (April 2022),
GAO-22-105051 (Oct 2021), GAO-21-551
(July 2021), GAO-21-387 (March 2021), GAO-21-265
(Jan 2021), GAO-21-191 (Nov 2020), GAO-20-701
(Sep 2020), GAO-20-625 (June 2020)
GAO-22-106044 Stimulus Checks: Direct Payments to Individuals during the COVID-19 Pandemic