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An Epic IRS Fail Leaves Millions of Americans Waiting for Relief

January 7, 2021

Through no fault of their own, millions of Americans have been sidelined in the COVID-19 crisis, unable to work due to government restrictions, as they wait for the pandemic to end. Now, the very same government agency that penalizes Americans for not paying taxes on time has failed to send COVID relief payments, as required under the law.

In late December, Congress passed legislation that included payments of $600 to individuals, $1,200 to couples, and another $600 per child, provided recipients meet income eligibility requirements. Those payments were supposed to be delivered by the Internal Revenue Service (IRS) through direct deposit. And that’s where things went wrong.

As the IRS acknowledged, it mistakenly sent millions of those payments to closed or inactive accounts and chalked it up to the speed with which it had to issue the second round of payments:

“Because of the speed at which IRS issued this second round of payments, some payments may have been sent to an account that may be closed or no longer active. By law, the financial institution must return the payment to the IRS, they cannot hold and issue the payment to an individual when the account is no longer active.”

In response to the question of whether Americans will receive those payments, the IRS only had this to say: “Maybe.”

“Maybe” is an unacceptable answer to those millions of Americans who are waiting for the government to provide some modicum of relief amid the economic shutdown that many state governments have imposed in response to the COVID-19 crisis. Unfortunately, it’s a painful reminder of government incompetence — and it should be a cautionary warning against expanding the IRS’s role to that of tax preparer, collector, and auditor, as some have advocated.



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