IRS Scrambles To Get Out Cash Payments But Faces Staffing And Systems Challenges Over the past 10 years, the IRS budget has been reduced by roughly 20%, leaving the agency with aging technology and forcing it to cut back on staff and training.

IRS Budget Cuts, Staffing Challenges Create Coronavirus Payment Headaches

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DAVID GREENE, HOST:

The Internal Revenue Service is under a lot of pressure to quickly disperse the $1,200 payments that have been promised to most people in the latest coronavirus relief bill. But experts worry that years of budget cuts, aging technology and staffing limitations caused by the coronavirus could all make this process drag on. Here's NPR's Kelsey Snell.

KELSEY SNELL, BYLINE: Cash payments delivered by the IRS through direct deposit to millions of people over the next few weeks - that's the goal Treasury Secretary Steven Mnuchin set last week at the White House.

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STEVEN MNUCHIN: It is a very large priority. The president has made clear we want to get this money quickly into your hands.

SNELL: Most experts say as many as 60 million people who already have bank information at the IRS may get those payments quickly, but that is a fraction of the 150 million individual returns the IRS projects will be filed this year, not to mention people who get Social Security income or the people who don't normally file taxes. They'll be looking for their checks, too. And that has former IRS commissioner Mark Everson very concerned.

MARK EVERSON: So there's a dearth of people who are qualified to do the work, and they're overworked.

SNELL: Everson, who's now vice chairman of the business tax adviser Alliant Group, says Congress is largely to blame. They cut the IRS budget by roughly 20% over the last decade. Technology investment, hiring and training have all fallen behind. That is a serious problem as the IRS prepares for a flood of new bank and personal information from people trying to get their money.

EVERSON: I am worried that if the IRS tries to do too much too quickly, you could have a major data breach.

SNELL: Nina Olson, who served 18 years as the IRS internal watchdog known as the taxpayer advocate, says customers are also feeling the cuts.

NINA OLSON: Some of what's hit the cutting room floor is quality taxpayer service.

SNELL: Right now phone lines are overloaded. And the IRS coronavirus website warns, quote, "do not call. Check back for updates." They say most people don't need to do anything and there's a new website on the way to update your information. But Olson says many elderly and low-income people don't have Internet access and need to call. What if they moved or got a refund on a prepaid debit card that expired? What if a bank account closed? Olson says people have a lot of questions.

OLSON: And that is really a problem when you are paying out money to people in a crisis situation where people are already anxious and it could be a matter of life or death of an individual or a business.

SNELL: Lloyd Doggett, the top Democrat on the subcommittee that oversees tax issues, blames congressional Republicans for cutting the IRS budget, particularly after a political scandal in 2013.

LLOYD DOGGETT: They don't like the IRS. It's a great campaign whipping boy, so IRS is underfunded to assure that it cannot fulfill its job in a appropriate way.

SNELL: Ohio Republican Jim Jordan led the criticism of the IRS over a scandal involving the targeting of groups applying for nonprofit status. Jordan says the cuts were necessary because the agency wasn't playing fair.

JIM JORDAN: And then coming and asking for more taxpayer dollars, it's like, really? I mean, that's just not going to fly.

SNELL: Some funding was restored to help execute the GOP-led tax cuts in 2018, and Jordan says the IRS is doing just fine now.

JORDAN: I think they can handle the job now. And if they can't, then we're willing to look at the evidence and hear them out.

SNELL: The IRS has been stretched even further by the coronavirus. An IRS spokesman did not address the budget cuts but says most workers are on the job and the virus won't impact their ability to get the payments out. Given all of the challenges, Everson and Olson say fully resolving the payments may take until next year. For now, they say follow the agency's advice - don't call; check back for updates.

Kelsey Snell, NPR News, Washington.

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