Eligibility doesn’t equal access — feat. Center for Taxpayer Rights’ Nina Olson and Community Legal Services’ Jen Burdick
A deep-dive on what it will take to ensure low-income individuals and families can actually access the new child allowance and other income-boosting provisions in the American Rescue Plan Act — to ensure that the law’s promised poverty reductions transfer from spreadsheets into real life. Subscribe to Off-Kilter on iTunes.
Poverty researchers estimate that the income-boosting provisions in the American Rescue Plan Act, which President Biden signed into law last month, will cut child poverty in half, and that overall poverty in the U.S. will fall by one-third over the next year. But should we expect those promised reductions in poverty to transfer from spreadsheets to real life? A lot of the answer to this question hinges on whether federal policymakers take the steps needed to ensure we don’t just make folks ELIGIBLE for historic income security protections like the new child allowance, the EITC expansion for workers not caring for kids in their own homes, and $1,400 relief checks — but whether we make sure low-income individuals and families can actually ACCESS these benefits.
So for this week’s pod, Rebecca sat down with two of the advocates working on the access part of the equation: Nina Olson, executive director of the Center for Taxpayer Rights, who served from 2001 until 2019 as the IRS’s internal watchdog known as the national taxpayer advocate; and Jen Burdick, a lawyer in the public benefits unit at Community Legal Services.
This week’s guests:
- Nina Olson, executive director, Center for Taxpayer Rights, and former IRS National Taxpayer Advocate
- Jen Burdick, staff attorney, Community Legal Services (@jen_burdick)
♪ I work and get paid like minimum wage
Sights to hit the clock by the end of the day
Hot from downtown into the hood where I slave
The only place I can afford ’cause my block ain’t safe
I spend most of my time working, tryna bring in the dough…. ♪
REBECCA VALLAS (HOST): Welcome back to Off-Kilter, the show about poverty, inequality, and everything they intersect with, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas.
In recent weeks, President Biden and Vice President Harris have been traveling around the U.S. trumpeting the benefits of the American Rescue Plan Act, from its $1,400 relief checks to a much needed extension of expanded unemployment insurance benefits to historic expansions of the Child Tax Credit, the Earned Income Tax Credit, and more. For folks looking for a deeper dive into what’s in the law and what workers and families should expect, our March 12th episode has a detailed overview.
Poverty researchers estimate that the income-boosting provisions in the $1.9 trillion relief package that became law on March 11th will cut child poverty in half and that overall poverty in the U.S. will fall by one third over the next year. But should we expect these promised reductions in poverty to transfer from spreadsheets into real life? A lot of the answer to this question hinges on whether federal policymakers take the steps needed to ensure that we don’t just make folks eligible for historic income security protections like, say, the new child allowance or the EITC expansion for workers not caring for kids in their own homes, or the $1,400 relief checks that started going out just a few weeks ago, but whether we make sure that low-income individuals and families can actually access these benefits. This is especially true for the hardest-to-reach groups like people lacking safe and stable housing and folks on the wrong side of the digital divide.
As the White House and Congress get to work on the next tranche of recovery measures, starting with updating key elements of the nation’s crumbling infrastructure, advocates for low-income families are cautioning that it’s long past time to invest in and prioritize our woefully underfunded social services infrastructure, which plays a critical role in helping low-income individuals and families access critical benefits that they’re eligible for. Meanwhile, since a lot of the American Rescue Plan Act’s key benefits are being delivered through the tax code, advocates are pointing to a trend of disinvestment when it comes to the IRS. Following a decade during which the IRS saw its budget cut by nearly 20 percent in inflation adjusted terms, IRS assistance with tax filing is pretty much a distant memory. And now when taxpayers call the IRS for guidance, its staff are only able to pick up one out of every four calls on average. In recent months, the numbers are even worse as more people called with questions about stimulus payments and other COVID-related tax issues, the IRS answered only one out of 11 taxpayer calls, they report.
The picture for legal aid is even bleaker. According to the Legal Services Corporation, a whopping 86 percent of low-income people’s legal needs are going unmet. And trouble with accessing public benefits is among the most common problems for which low-income families sought but did not receive help due to limited resources. During my years as a public benefits lawyer, I had it rammed into my head indelibly that eligibility doesn’t equal access.
So, with the American Rescue Plan Act now law and all the focus on infrastructure and building back better on the horizon, for this week’s Off-Kilter, I sat down with two of the advocates working on the access part of the equation to ensure that we actually see the law as promised poverty reductions move from those spreadsheets into real life. Nina Olson is the executive director of the Center for Taxpayer Rights. She also served from 2001 until 2019 as the IRS’s internal watchdog, known as the National Taxpayer Advocate. And Jen Burdick is a lawyer in the Public Benefits Unit at Community Legal Services in Philadelphia, which I am, of course, proud to call my legal aid alma mater. Let’s take a listen.
Nina, Jen, thanks so much for taking the time to come on the show.
NINA OLSON: Thanks for having us.
JEN BURDICK: Yeah. Thank you so much, Rebecca.
VALLAS: Nina, I’m going to start with you, and actually I want to ask both of you to sort of introduce yourselves. I named your titles, your affiliations, but I would love for our listeners to get to hear a little bit about what you’re bringing to this conversation and what you do at your respective organizations. Nina, talk a little bit about your role now with the Center for Taxpayer Rights and also what you did as the National Taxpayer Advocate at the IRS.
OLSON: Yeah. Well, I think I’ll start even further back. In 1992, I founded the Community Tax Law Project, which was the first nonacademic low-income taxpayer clinic in the country, and it was modeled as a legal aid to represent low-income taxpayers before the IRS and the courts with tax problems. And from that, the work that we did there, Congress adopted the funding for low-income taxpayer clinics around the country. And it also got me to the attention of Congress. And so, when the position of the National Taxpayer Advocate became available, there was interest in me taking that position.
And that is a statutory position that heads the Taxpayer Advocate Service, and it is charged by Congress to help taxpayers solve their problems with the IRS and make administrative and legislative recommendations to mitigate those problems. And so, there are about 79 offices around the United States, at least one in each state by law. It’s like the last vestige of the IRS where there’s actually a geographic presence. The local taxpayer advocates over my tenure took in four million, about four million taxpayer cases and had a pretty good relief rate, resolution rate for those. Having left the IRS, retired from it, I founded the Center for Taxpayer Rights, which was really taking the most fun part from my job and putting them in a nonprofit and continuing to do what I was doing, which is advocating for administrative and legislative recommendations that protect taxpayer rights, ensure access to justice for taxpayers, and it’s both internationally and domestic. And because of all that’s been going on with COVID, we’ve been spending a lot of time on litigation strategy and things like that for the various impact payments.
VALLAS: And we’ll get into this, but one of the things that you have been doing a lot of thinking about in this moment, you both have, is implementation of the American Rescue Plan Act, and critically, the tax provisions that are intended to boost people’s incomes as part of that relief package. Jen, I’m going to turn to you next. Talk a little bit about your work at Community Legal Services in Philly and the clients that you represent. What are you bringing to this conversation? It’s a little different than Nina’s experience, and a lot of it flows from your direct client representation.
BURDICK: That’s true. Thank you so much, Rebecca. Yeah, so, as you indicated, I work at Community Legal Services in Philadelphia. I’m a public benefits lawyer. I focus much of my work on connecting both children and adults with disabilities to Supplemental Security Income, which is a Social Security program that provides a direct cash monthly payment to people with disabilities. I do a lot of work working with people directly and doing advocacy around this. And what’s really important about this and what makes it relevant to this conversation initially is typically, SSI is the largest monthly cash benefit that is available to the low-income community. So, it is something that we work really hard on because we know folks, particularly if you have a disability or you’re raising a child with a disability, face significant expenses that aren’t otherwise covered, and you really need this money to assist. And it can be a watershed point for my clients when they get it, because it helps make sure that they have money to help with stable access to food, prevent housing insecurity.
But what has brought me to this particular work is there is exactly what we’re discussing today, which is access issues around the stimulus. Back when the first stimulus payment was made available through The CARES Act, Social Security recipients were supposed to get those payments automatically, and many adults did. However, there was also a very significant payment to assist with children, a dependent payment. And I determined back in March and April, I found that most of my clients who had received their $1,200 automatically did not get that dependent benefit. And part of it is, is there was a non-filers portal, which we’ll talk more about later, that people were supposed to register on in very short time periods ranging from two days to 10 days. There were supposed to register the fact that they had children that they were raising in order to get that payment.
And a lot of people didn’t know about it and also could not, because registering on an online portal requires layers and layers of access that a lot of people who don’t work directly with the low-income community don’t realize how many different points it is. But having a computer, having an Internet connection, having the digital literacy to be able to fill out an online form: These are all things that policymakers sometimes take as for granted that people have. And in my experience, my clients don’t. So, I think as more and more really essential and exciting benefits become available through the tax code, making sure clients like my clients who don’t necessarily have access to a computer or the Internet and aren’t necessarily going to be able to use an online form, are also going to be able to access them.
VALLAS: And it was actually conversations with you and some of your colleagues that got me thinking about the need for this very episode of Off-Kilter given that all too often, the sexier conversation that actually gets talked about, that actually gets covered, is the eligibility conversation. But the access piece really kind of often gets forgotten. But not by public benefits lawyers, which is why I’m so excited to have you as part of this conversation as well, Jen.
So, Nina, I’m going to hand it back over to you to provide a little bit of an overview of the Child Tax Credit expansion, the EITC expansion, some of the other kind of key income-boosting provisions of the American Rescue Plan Act that we’re talking about here, just as sort of a primer for anyone who wants a little bit of a refresher. I mentioned up top for folks who are looking for a deeper dive and kind of a more comprehensive overview of the new benefits that are authorized in the American Rescue Plan Act, we did do a really deep dive with CAP senior fellow Seth Hanlon for our March 12th episode. So, I’ll refer folks there if they’re looking for something more than just kind of a cursory overview. But I mentioned that there are estimated poverty-reduction effects that are being actively trumpeted as kind of some of the top lines of what this law is expected to deliver: child poverty cut in half, poverty in the U.S. overall cut by one third. Provide a little bit of a reminder for us about what those key new benefits are that Jen was mentioning.
OLSON: Yeah, and I will look at this from the perspective of someone who knows IRS administration, you know, sort of the inside story, and then also apply the outside, keeping in mind how people would be able to access these benefits. But clearly, the economic impact payment is just a quick getting out money to people. And there’ve been, IRS, the Congress, rather, seems to have learned from the previous two rounds and made some provisions that are more inclusive. For example, U.S. citizen children of undocumented persons are able to receive that economic impact payment. Now the question is, will they get it is another issue. But that was not there in previous years. And of course, the economic impact payment is $1,400 for individuals and then $1,400 for qualifying children.
I think there are a couple of important changes. And I think Jen’s litigation, which she was super modest about, characteristically so, McGruder v. Mnuchin, which challenged the IRS, saying that they weren’t going to let Social Security recipients and SSI folks claim their dependents if they missed the deadline and have to go back and wait until 2021. Congress has actually ordered the IRS, after it makes its first round of payments, to get this money out as quickly as possible, has ordered the IRS to basically make additional payments. So, if an updated return comes in, if the IRS makes the payment based on a 2019 return, and there’s a new child, then a 2020 return comes in that shows, maybe based on income or because of another child or some other factor, you’re entitled to more, rather than waiting until 2021, the IRS has to make an additional payment out. And I think that’s incredibly important.
Another thing that is in the bill about the economic impact payments is the amount of money the IRS is getting. And we’ll talk more about this. But they are basically getting $1.4, almost $1.5 billion for the administration of the advance payments and the provision of taxpayer assistance. And so, we will come back to that. The Child Tax Credit is refundable now, and it’s pushed, this is all for one year, but that’s the goal, is to make it more permanent. And if 17 year olds are included, whereas before they were not, it’s $3,600 for children under six and $3,000 otherwise. And then what we’ve all been talking about and focusing on is the provision of a temporary program for advanced payment and periodic payment of the Child Tax Credit for 2021, which would commence (if the IRS can do it) by July 1st and would end on December 31st. And there are all sorts of requirements there. But the idea is this is the first time that the IRS has had to do a monthly payment system in advance. It does have some experience with this with the Advanced Premium Tax credit, but that’s not making payments to taxpayers; that’s making payments to insurance companies. And, of course, it’s partnering with another agency on that.
The other thing in the provision, which we’ll probably talk a fair amount about, is the requirement that the IRS create an online portal. And that’s not a permissive thing. It’s a shall. And there are questions about on the periodic payments, the Commissioner’s already said they don’t know whether they’ll be able to do monthly. He’s not even committing when they will be ready to start. I heard him sort of hedging on whether there would be an online portal. And we’ve already started having conversations about litigation in order to make sure that there is an online portal if the IRS says, no, it can’t. The portal shall allow people to elect out of the monthly payments and shall allow them to provide modification information.
And that’s really important on several fronts. One, between the last time you paid your tax return, filed your tax return, which the IRS is going to rely on to calculate this monthly payment, you may have had an additional qualifying child born or one may have aged out, or you may have separated. There may’ve been a change in a marital status, and you don’t want the monthly payments going to your ex-spouse who no longer has the children, you have the children, this would be a vehicle for you all to, people to be able to update that.
The Earned Income Credit expansion is, for the childless worker in particular, really important changes for lowering the eligibility age, raising the, removing the cap basically on eligibility age, and expanding, you know, raising the dollar amount of the childless worker Earned Income Credit. And the other thing is, which is hard for people, it’s really technically in the weeds, but it changes for the Earned Income Credit — and this is a permanent change — the definition of “married” in the code for purposes of the Earned Income Credit. And this is really important because a lot of times, particularly in low-income populations, you’ll have people who will separate, but they have not gotten, you know, they have never gotten divorced. And so, this change in the definition of married for the purposes of EITC really means that some people who might otherwise be forced to file as married, filing separately, won’t. They may still have to file married, filing separately, but for purposes of EITC, they will be considered not married, and so they won’t be kicked out of the EITC.
I think this issue of the portal is huge, and we’ll come back to that: not just the update portal for the advanced Child Tax Credit, but the absence of an expedited filing portal for purposes of the economic impact payment and other provisions.
VALLAS: And we’re going to get into a lot of the different elements that you just put on the table. But that’s a really, really helpful overview and, I think, a place to start and jump off from.
Jen, I’m going to bring you back in next. I mentioned that several of these expansions are literally historic. That might be an overused word; it might sound cliched to keep calling it this historic law. But to create the first ever guaranteed minimum income for families with children, for example, is truly historic for the U.S., right, joining our peer nations in actually having some kind of a universal child benefit, even if it has only been authorized for one year. Although lots of advocates, myself included, you included, right, are going to make it permanent. So, we know that’s the direction it’s headed. But I want to come back to the question that I raised in the intro, right? Which is, will the promised poverty-reduction benefits that are estimated to flow, that are hoped to flow, from the eligibility that has now been so dramatically expanded for something like the Child Tax Credit actually materialize?
And so, I want to bring you back in next on this, because you touched on this in sort of describing how you came to this work. And actually, tax law is a newer area for you. You, as a public benefits lawyer, you described you’ve been focused on Supplemental Security Income, a really critical program for particularly folks with disabilities and for seniors. But talk to me a little bit about why eligibility doesn’t equal access. You are seeing clients every single day who are facing the kinds of problems that are what advocates are concerned about and that could be the difference between the poverty-reduction benefits actually happening and not. What do we know about who the people are who are already falling through the proverbial cracks when it comes to low-income refundable tax credits, and why? And I think you might’ve actually come into this conversation with a few client examples to help put a face on this.
BURDICK: I did, Rebecca. And I just want to thank you for continuing to focus on this question because it’s a question that has really been keeping me up at night ever since the American Rescue Plan passed. Because this is very, very exciting, but it’s only exciting if it works, right? So first, from a big-picture standpoint, as Nina pointed out, the IRS did effectively get stimulus payments out to lots of people because it was able to use information that the IRS already had access to because so many people file taxes. But what many people may not know is there are lots and lots of people who do not file taxes every year, and there’s lots of people who do not need to file taxes every year. This isn’t just because people don’t, are trying to avoid filing taxes. You literally do not need to. Included in that category are people who have no earnings; they just don’t work. They don’t have to file taxes. Or if your only income is Social Security, Veterans Disability benefits or other benefits of that nature, you are not required to file the tax return. Which means that the IRS also does not necessarily have the kind of information about you that they do about other tax filers that would allow them to push out benefits like the stimulus payments and now, like these wonderful historic Child Tax Credit payments that may come out as certain advance payments.
This means there’s a large population of people who are both not in the IRS system, but also are not familiar with tax filing. And for anyone who’s ever filed their own taxes, I think everyone can agree that filing taxes is a complicated process. It requires collecting documents, identity documents; if you are working, W2s, 1099s, other documents; but also having some understanding of how the tax code classifies you. What does it mean to have a dependent? That is a loaded question, and that’s not something that everybody knows. So, filing taxes can be challenging. And so, I bring this up because that means there’s lots and lots of people who now, in order to access these benefits, need to file taxes. They need to take steps to file taxes, which is a huge undertaking. It means getting the word out so that people know that they have to file taxes. I still talk to people every single day who tell me not only, “Oh, of course, I’m not going to file taxes; I don’t need to.” And they follow that up by saying, “and of course, I can’t file taxes because I only get Social Security benefits.” That’s a myth. But there’s a lot of myths about who can file taxes and can’t that need to be countered.
But there’s also a lot of obstacles to filing taxes. And I want to talk about two clients that I’ve recently been working with that kind of demonstrate different problems. So, the first one, I’m not going to share his name. I’m just going to call Mr. N. He is a citizen, but he came from Cambodia and he only speaks Cambodian. Moreover, he had a stroke. So, very few people can communicate with him, including interpreters. We are lucky that one of the social work staff at CLS can understand him and has to work with him. And I bring this up because he’s never filed taxes before because he has, ever since the stroke, has survived off of disability benefits. Now he has to. And there is a wonderful program called VITA, or the Volunteer Income Tax Program, where you can get free assistance filing taxes; however, to access that system, either to set up an appointment with a person — and those appointments are hard to get — or to do it virtually, you have to use an online portal where you answer a bunch of questions, and you submit the kind of paperwork that the IRS needs to file taxes. He can’t do that. You know, the portal’s in English. Even if he had a computer, he wouldn’t be able to understand it. So, that is the first barrier is the language barrier.
But also this particular client doesn’t have digital literacy. So, even if he could speak English, he wouldn’t be able to do it on the phone. In order to even sign him up for an appointment with a tax expert, during the pandemic, we had to send someone with a mask, taking all the protocols to his house to help him identify the documents they needed. Because, of course, those are also all in English, so it’s hard for him to identify which is his Social Security card and which are his other documents, upload them, and send them in. And then they’re going to call back to go over these things with him, but of course, they can’t use an interpreter. So, we need to have our social worker available to serve as the interpreters. And so few people can understand him because of his stroke.
Now, I understand this is a unique example, but it presents a couple of the different access issues that people are having. It’s the focus on online is really helpful for people with digital literacy. But a lot of the people who are falling through the cracks, who are low literacy in general, can’t read or write in general, or are low-income or older, computers and computer forms are not second nature. This is going to be challenging, and it’s extra challenging in the pandemic environment where it’s hard to find friends and neighbors to help you.
Now, another person I want to bring up is someone who Nina mentioned, which I appreciate, is Mr. McGruder. Now, he’s someone that has been a huge part of my pandemic stimulus story because, as Nina mentioned, he’s a Social Security Disability recipient through his two grandchildren. He wasn’t able to use to the non-filer portal quickly enough to get his dependent payments. So, I, with some partners at Villanova and Berger Montague had to sue the IRS in order to try to get him access to those payments. There was no other way to get them. And he did eventually get the $1,000 he was owed in stimulus money for the first round for his 2-year-old and 9-year-old grandchildren who he is the primary caretaker for.
However, the story doesn’t end there. Even though we finally sued the IRS in order to get that first round of stimulus payments that he was cut out of, he also didn’t get his dependent payments for the second round. So, now he needs to file taxes because it’s very clear that for whatever reason, as a non-tax filer, his information about who he’s taking care of is not in their system. However, Mr. McGruder, he is not literate. He cannot read and write. He does not have a computer. So, a lot of the tax assistance that is available, which is online, is not available to him.
So, and in addition to that, when we did finally connect him with someone who was going to try to file taxes for him online, which is the fastest way to get your stimulus payments if you’re missing them, it turns out that about 15 years ago, he had an identity theft issue that got communicated to the IRS. And I bring this up because this is a really big problem in that a lot of people, privacy is important, so if there are identity theft issues, what will happen is the IRS will say you cannot file taxes without a special PIN that they’re supposed to send you every year. It’s called an IP PIN. But Mr. McGruder has moved since that happened. He hasn’t received his PIN in years, which means he also can’t file online and has to use another process. This is something that he alone would never have been able to figure out.
I’m very happy we were able to find him someone who can assist him with this process, but most people like him are not going to be able to have the assistance they need to navigate these issues. And the IRS is super-understaffed. They’re not able to answer the phone and really work through these things with consumers. So, both of these people identified just the multitude of cracks that exist for all these non-filers who now need to file taxes in order to get these really important benefits. And I don’t mean to present this as a dire situation, because there are a lot of problems with this process, and it’s going to be particularly hard to get it for people in the cracks. But at the end of the day, I want to emphasize that we are so pleased that there are these monies available. And we do believe, with thought and consideration, we can create a program to implement this, to include the people who are falling through the cracks.
VALLAS: Nina, I want to bring you back in here because Jen is offering multiple client accounts here of what it’s like for folks to try to access these benefits that are being made available to them in theory, but who are not quite the person that the rollout is designed for. You mentioned before, and I referenced as well, the decade, the past decade of really substantial disinvestment that has taken place at the IRS. It’s not just unique to the IRS: Disinvestment in core government functions is something that has happened in recent years in a variety of arenas. But focusing on the IRS, talk a little bit about the picture of what’s going on at the agency, kind of the value and the urgent importance of that influx of more than a billion dollars to administer these new benefits, as you mentioned, and whether that’s enough to arm the IRS with what it needs to be able to implement these programs.
OLSON: Yeah. Well, I sort of have a slightly different perspective from many other people about the IRS funding and its current situation. I’ve written for years about the IRS need for additional funding and for upgrading its information technology and things like that. But I’ve also been highly critical of the IRS about how it’s used the funds that it has allocated to it. And I won’t go into enforcement, but taxpayer service has been just steadily eroded. And the IRS’s response has been to go more digital. So, it is believed that taxpayers can do self-service accounts, and that it wants to move people from the phones. In 2005, it actually had an application that was a telephone. It was Teletax where you could use the numbers on the phone to answer prompts and file a simple income tax return by the phone, and that would’ve gotten into the system electronically. But in 2005, it decided to eliminate that because it thought not enough people were using it. Now it had stopped promoting it for several years, so why anyone would even know it existed, I don’t know.
In 2014, it stopped preparing returns itself, and it had over 400 walk-in sites where it did return preparation for low-income, elderly, and disabled persons so that people could make an appointment and or even walk in and get their returns prepared. The IRS stopped doing that, and it turned to VITA to do it. But VITA is a limited resource. And so, what stepped in were unregulated return preparers, you know, groups that, many groups, many preparers that were predatory that stole refunds, things like that, created identity theft cases for the taxpayers right then and there. So, this is the environment, plus the constant push to digital. My office did research that found, of the taxpayers who were filing returns, 41 percent of them did not have broadband access in their homes. And 14 percent of the taxpayers who were filing did not have any Internet access in their homes. So, you can imagine what those figures are for taxpayers who have not filed: people that are going to be brought into the system but have no filing requirement.
And that leads me to something. So, you know, to the IRS’s credit, creating this non-, what they called the non-filer portal last year, I think we were all very excited about that because it looked like maybe that was something we could build upon to really create something that would give some access to those people who could handle the Internet. I do have problems calling it the non-filer portal because in IRS speak, a non-filer is someone who has the obligation to file and hasn’t. So, it has negative connotations. So, I’ve sort of adopted the language “expedited filing portal” or “simplified filing portal” or something like that in order to make it more positive and legitimate. But as Jen has pointed out, that’s just first of all, that’s not in existence. The IRS has said that they’re not going to do it this year, which is very troubling. They’re going to insist that people, if they want their children updated into the system or things like that, are going to have to file a 2020 return. But they also are not doing anything on the phone. I think if you looked at the simplified filing portal, you could see that the questions that the IRS were asking could have been translated into a phone app that some of Jen’s clients could navigate and would be very easy to do.
I also want to just say, you know, this also goes to whatever portal they’re creating for the advance Child Tax Credit, that may not be accessible then to persons who have difficulty with these things. And that means that the payment may go to the wrong person. And if you don’t get updated information and the payment goes to the wrong person, that will be considered an improper payment when you get around to reconciling the payments at the end of the year. And we know from the Earned Income Tax Credit that members of Congress get very upset when there are improper payments and direct the IRS to doing more audits of this population, etc. And so, that could be even more chilling: where you have someone who has, for the first time, entered the system to get money back that’s a social benefit that’s supposed to be delivered to them. And then because of the way the technology works, the payment goes to the wrong place, and they end up being audited. They will never join into that system again.
So, all of these things are very disturbing. And they’re sort of the consequence, in some ways, of the reduction in the IRS budget, but also the IRS making the case for digital, digital, digital and ignoring that, as I keep saying to everybody, taxes are not like ordering a package off of Amazon. You know, if you make a mistake with Amazon, you can eventually figure it out, and they’re not going to take your home. They’re not going to assess a tax against you that’s going to follow you because you can’t pay for another 10 years. The IRS can garnish your paycheck. It can take 15 percent of your Social Security automatically. And so, these have long-term consequences, and people don’t want to get up wrong against the IRS. They want to talk to the IRS and to make sure that the IRS has heard their story. And, of course, they need representation.
And the final thing I’ll say about the budget is that the Commissioner said in a Ways and Means hearing that what they needed in order to get the phones to be up at some sort of decent level so that when people called, the IRS could get, people could get through to them, was about 20,000 customer service representatives. With the new funding, the IRS projects that they will have 13,000. So, we already know that they’re basically only at two-thirds at the level that they will need to be to have somewhat decent customer service at.
VALLAS: Now, through all of this, anyone who’s listening who has any level of familiarity with low-income refundable tax credits — the Child Tax Credit and the EITC, which obviously are not new programs; they have been around for a while. What we’re talking about here is significant expansions of those programs so that lots of new people are eligible, and they’re operating a little bit differently. But these are programs that have existed and that have already been out of reach without assistance for a lot of folks in ways that you were describing just a minute ago, Jen — anyone who’s listening to this and going, you know, I feel like there’s already help for this. Isn’t there a program? Well, you’re right. It’s called VITA, the Volunteer Income Tax Assistance Program. And a lot of folks who are listening might even be VITA volunteers. I know we get feedback from listeners sometimes who, whenever we talk about tax issues, they say, “Oh, I was helping someone through VITA.” So, I know we’ve got probably a lot of VITA volunteers listening.
Jen, I’m going to go to you next to ask, why is VITA not enough for what we’re up against here? You, as one of the advocates who’s really thinking from a direct client representation perspective about what it will take to implement these newly-expanded programs and to reach the hard-to-reach groups who have already been missed in some ways by our existing infrastructure, you have been advancing a sort of a new idea for investing more significantly in our social services infrastructure to ensure that it’s up to the task if IRS and our existing supports are not going to be enough. But before you get into talking about that new idea, and legal services is one of those types of assisters that might be able to receive assistance if policymakers were to go that route, why is VITA, which is wonderful, which is great, likely not to be enough for the influx of folks who now are going to need help?
BURDICK: It’s an excellent question, Rebecca. And first of all, to all your listeners who are VITA volunteers, thank you so much. You are needed this year more than ever because if it wasn’t clear from our earlier conversation, this year, with the American Recovery Plan, what really needs to happen is not only do all the regular tax filers need to file — which includes all the low-income tax filers volunteers have been helping for years — but now everyone else needs to file too, right? So, VITA is more necessary than ever because we need to bring all the non-filers into the system. To all of your listeners who are not VITA volunteers, please consider volunteering! There’s a lot of need this year.
But after that little PSA, I do want to say that VITA isn’t enough. There’s a few reasons why VITA isn’t enough. It is a wonderful organization, but it’s also a primarily volunteer organization, right? So, the main people who are helping low-income and no-income people file taxes is staffed by volunteers. And this year, with all of these special tax credits and advanced tax credits, the request that was made at the last minute was essentially, can this be scaled? And you cannot scale a non-professionalized workforce. So, VITA needs more money. It’s not set up to do this. But the other reason that VITA isn’t enough is VITA is set up to allow volunteers with tax expertise to help people file taxes. VITA is not a collection of case managers or social workers who are what is necessary to bring in this additional population that now needs to file taxes.
So, with some of the things that I noted above, these VITA tax experts, they’re great. They are there to help people who can bring in the documents the IRS requires — the identity documents, photo ID, Social Security cards, I-10s, all of that — can look at it, and with other forms you bring in, can help you figure out what you need to do to file. But they’re not in a position to help someone who comes in who does not have a photo ID figure out how to change that, right? Or if you do have a problem like Mr. McGruder I mentioned with the identity theft issue, he needs to recover his IP PIN. That is something you need to recover from IRS. It can take some advocacy if you don’t have particular types of credit or assets that they can use to verify your identity. VITA volunteers are not set up to do that kind of advocacy with IRS.
So, as more and more people need to file who haven’t filed before, many of them have these issues, whether they have a language access issues, whether they are missing documents, whether they need help recovering documents, that needs to happen. And that work, the VITA, it’s just unfair to even suggest these volunteers need to pick this up in addition to this additional caseload. So, I know we’re going to get later to our idea about additional workforce. But I will also say that VITA, as I mentioned before, it is really important. So, as we try to figure out how to create essentially wraparound services for VITA, you know, figure out who else is available that can help people work out these issues so that they can go to VITA for assistance with tax preparation, I just want to reaffirm that we also need more VITA volunteers this year. So, VITA is important, but there needs to be more.
VALLAS: And Jen, while you’re —
OLSON: What I’d like to bring in, I mean, something that Jen said is….
VALLAS: Go for it, Nina.
OLSON: Yeah, part of the issue is that, and this is fundamental to going forward, is that for years, I’ve been saying that the IRS needs to recognize that it is not just a revenue collector; it is a social benefits administrator. As the EITC ramped up over the years, and then with the advent of the Affordable Care Act and particularly the Premium Tax Credit, you had taxpayers being brought into the system (forget about those who were below the filing threshold) who had characteristics such as what Jen has described and challenges. And the IRS has just merrily gone on its way, viewing itself as having one mission, which is to enforce. And I emphasize that. It views itself as an enforcement agency, enforce the tax laws. And that’s not a good fit when you’ve got tens of millions of taxpayers who are really receiving social benefits. And you see that in the IRS not thinking holistically about these programs that it’s now charged with administering.
And I have said for years that the IRS needs to revise its mission statement to acknowledge that it has two lines of business: revenue collection and benefits administration. And on the benefits administration line of business, that brings in the focus that you need to have people with casework training and focus. And your performance measures are different and how you measure success is different and your goals are different. And if you don’t do that, then you don’t think about what alternatives other than VITA or how you would supplement VITA. You know, you don’t think about that you need paid advertising in order to be able to get the message to the populations and in the markets that you want at the right time. And so, those are, you know, it doesn’t make the case to Congress that it needs that.
VALLAS: Well, and this is where I was going to go before, but that’s just such an important additional point that you just made, Nina. And I want to sort of repeat your words, because they are going to be ringing in my head, I think, for probably in perpetuity whenever I think about the IRS, because you just you put it so well: They need to understand that they are also a social benefits administrator. And that is a really important function in addition to that revenue collection. And it’s only growing here now, in this moment with these newly-expanded benefits and programs.
Jen, going back over to you, and this is where I was going to go before. I feel like instead of later, no time like the present. Talk a little bit about your idea for what investment in our social services infrastructure could look like to ensure that it’s up to the task of helping folks who aren’t going to be reached by VITA, who aren’t going to be reached by, obviously, the IRS, and who aren’t just organically going to smoothly receive the benefits that they’re newly eligible for. And then we’ll go into some of the other ideas that you and Nina both have for how we can be simplifying and expanding access.
BURDICK: Well, one of the really important things that needs to happen is there needs to be funding and support in place for community assisters to help low-income people or non-earners access tax benefits, right? There are a lot of organizations on the ground who are currently working with underserved populations — case managers, social workers, lawyers at public interest places like Community Legal Services — who do take it as part of our mission to make sure our client gets the benefit, right? So, if somebody shows up at our doors, and we don’t do tax filing, but since we’re talking about it, you know, if they didn’t have the proper paperwork, we would take it on as part of our obligation to help them get the ID or whatever else they needed in order to get the benefit that they needed at the end of the day.
So, the problem is, is during the pandemic, many agencies, including my own, are already really under a lot of stress just doing the work that they used to do. So, adding on this additional assistance to help people get into the tax system isn’t going to be realistic without really, new funding and support to do this work. It’s also really important that there is training in place to make sure everyone can do it properly. So, we think it’s really, really, really important that, in addition to making sure that these wonderful benefits exist, that there is funding available to allow community assisters to assist in this way. So, and —
OLSON: If I could just — This is where I think running a program through the tax code sort of means that you treat it the same old, same old. And you can compare that to the Affordable Care Act, where from the very beginning, they had community assisters. And so, I think, Jen’s point is really well taken that VITA does X, and in this instance now, you need Y and Z. You need something more.
VALLAS: And I want to repeat the word I used before. I didn’t use it willy nilly, of course. I called it an investment in our social services infrastructure. Of course, we are into a place in the recovery conversation where “infrastructure” is now the word of the day. I think it’s fair to say it’s infrastructure week, guys. So, wink, wink, nudge, nudge for some of the timeliness of this conversation.
Nina, I want to bring you back in to talk a little bit about some of the other ideas that you and others have been starting to develop around how we could be simplifying and streamlining access. And Jen, you’ve got other ideas as well that I want to make sure you get a chance to share. There are lessons that we’ve all been learning from the past few rounds of economic impact payments: the $1,200 checks, the $1,400 checks, the $600 checks, different amounts. There have been sort of adjustments along the way. But there are other ideas that draw from the administration of other social benefits. What do you want to be putting out there, Nina, that you feel is doable and would make a difference in terms of actually trying to reach folks, not just through the traditional filing process?
OLSON: Well, I think I just have to say that one thing that the IRS could do, and it is through the American Rescue Plan, it’s actually being forced to confront this, which it was able to ignore for years, is can it proactively send out payments to people without having a tax return filed? And most tax lawyers will tell you that they do not think there’s any requirement to file a return. The IRS could determine that based on the information it has, a person’s eligible for something. And that’s very important for things like the Childless Worker EITC or even in the instance of the economic impact payments that say, on May 16th, the day after the filing season ends this year (because it’s been extended), the IRS could look to see — and I don’t mean just the day after; it might be June before it does this — to see who hasn’t filed a return and for whom does it have W2s or 1099s for.
And if you’re under the filing threshold or you’re under the threshold of eligibility for an economic impact payment, shoot out the payment and see what, you know — Well, you don’t have an account. OK, send out a check. The check will be returned if it lands somewhere that the person isn’t. For the Earned Income Credit, particularly the childless worker Earned Income Credit, so many people don’t claim it even when they’re filing a return, that once you’ve got a return, you could look to see whether that person is eligible based on the income on that return and issue an automatic payment without requiring them to do an amended return. And right now, the IRS is having to face this because of the unemployment insurance exclusion where so many people filed returns reporting the unemployment insurance. And then Congress passed a law saying that $10,200 was not taxable of it. So, it’s going to have to face that. And that may be an opportunity for us to build these sorts of things.
And again, I come back to the portal. You know, if you did an expedited or simplified filing portal, you could basically ask about three more questions, which could also be answered on the keypad of a phone, to make sure that someone was eligible for the Childless Worker EITC. And so, without having to go through all sorts of forms, that could be into the system as a return, and then the taxpayer would be sure to get that kind of thing.
So, the IRS is going to do a lot of outreach. Kudos to the IRS for translating materials into lots of different languages. But it is really not getting to the places that Jen is talking about. It’s going to its traditional partners and maybe expanding into the groups that it’s normally going to. And what it really needs to do is rethink its relationships and staff up its outreach staff so that they are able to make, you know, be located in the communities, so that they can make those relationships with the groups that are actually there on the ground. And there are right now about 14 states in the United States that don’t have a single outreach employee located in them for the IRS.
VALLAS: And Jen, same question to you. There’s a number of direct service organizations, social service providers that are in local communities kind of cropping up trying to chase the demand and to get out the word and to educate their communities and to say, we’re here to help. But you guys have ideas that, similar to some of what Nina’s putting out there, could really be quite transformational if they were administered by the IRS. What other ideas that Nina hasn’t named do you want to put out into the ether as we try to manifest some of these implementation best practices?
BURDICK: Absolutely. So, I know Nina mentioned data matching. I know that, just to clarify, there’s so much information that the government already has about people, particularly the populations we’re talking about. Even if it’s hard to file a tax return, a lot of our clients have already gotten approved for benefits at the state level, some on the federal level. There has been a decent amount of data matching in certain pockets like Social Security people we were talking about earlier. But expanding those programs, making sure that anyone who’s been approved for SNAP, which is formerly known as food stamps, or some other programs could automatically, to whatever extent possible, be enrolled for any of these programs. I know Nina was talking about that for the EITC, but I think for any of the programs it could be really, really transformational.
We’re also, Nina mentioned before the old telephone tax filing system. Every time she brings that up, I get so excited and also so sad because that’s the kind of thing that we need. We need non-digital access, right? And it doesn’t have to be a person. It would be better if we could have navigators and assisters and people that can help. But even having some sort of teleprompt system over the telephone, that would increase access for many people that will not have it over a computer or broadband for so many issues. So, data matching, I think, would be huge. I think these portals that have happened, they are helpful. I think with additional thought and consideration, they could be written in more plain language. They could be made more accessible.
Another thing that I think is really important is that there’s a lot of confusion in the world about who can help people with these different forms of access. There’s a lot of concern that if you’re not a tax lawyer or you’re not a tax filer, that may be certain case managers or social workers shouldn’t get involved. I know previously, the IRS did come out with some guidance suggesting that you could go to friends or family for help. I think making sure that that is more clear down the line is going to be essential, particularly if these benefits do become permanent, and I hope they do. Because I think making sure that any community assister, formal or informal, can do this without liability is going to be very important.
VALLAS: And Jen, you just referenced — and we’re running out of time, but I feel like we would be remiss if we didn’t give a little bit of voice to this — you just mentioned again, and I’ve referenced as well, that this is just one year, just one year of the child allowance. Multiple different aspects of the income-boosting provisions within the American Rescue Plan Act are temporary. Many of them are authorized on different time periods. But the child allowance, for example, is authorized for just one year. And so, simultaneously, as advocates like you and Nina are working to try to figure out implementation, there’s also the subtext of this ongoing fight to make the child allowance that newly exists for that one year permanent. Is there anything else that you want to offer on that point, sort of the case for making this more than just a one-year experiment?
BURDICK: So, I just would say we need to make this permanent. Investing in children invests in all of us. The research has been clear that additional income has long-term benefits for children’s educational attainment, for their employment, for their health. Too many children aren’t given what they need to succeed. And just to be clear, this expanded Child Tax Credit, it is offering, depending how it’s administered, possibly $250 to $300 a month for each child in the household that’s 17 or under. So, for many families, we are talking $550, $600 a month of income. That is an astonishing amount of money in our current system. As I said, I typically help people get SSI benefits. It’s one of the largest cash payments that’s available. That’s $783 a month. Here, it’s almost that for two children. And what that could do for the people I represent.
I was talking to some of my clients about it. You know, many, many students are at home this year because in Philadelphia, there’s still remote school because of the pandemic. Many of them said that the free Internet is terrible. And if they were able to have extra money a month, they would, one of the first things they’d do is invest in stable Internet so that their kids could be more successful at school. It would decrease food instability, which is just a fancy way to say that would make sure people actually had enough food each month. Food crisis has also been at an all-time high. It would keep people in their housing, which not only cost is terrible for the families that are facing eviction, but really costs the whole community. And all that instability doesn’t let people really build community moments and gardens and all those things that really benefit when people stay in place. So, I think if we could invest in our children in this way, this is not just an investment in them. This is really an investment in our society as a whole. It would be fantastic.
VALLAS: And we’ve got lots more where that came from in terms of the evidence, the case for guaranteed income policies like this child allowance in our March 19th episode with Dorian Warren and Aisha Nyandoro talking about the Stockton Universal Basic Income Pilot, as well as the Magnolia Mother’s Trust and lots of other sources of evidence that we now have from the U.S. and from other countries that, breaking news, giving people cash makes them less poor and makes their lives measurably better in lots of ways that are not just short-term good, but bring long-term benefits, too. Our March 19th episode is where I’ll send you. Nina, you’re going to get the last word.
OLSON: Oh, thank you. I was just going to say that we need to look at the temporary program as what I’ve been calling a proof of concept, because I think we need to manage expectations. It’s being implemented under pandemic circumstances at the IRS. And the IRS is being told to do a lot of things on a very quick turnaround. And so, I’ve been thinking that the way to approach this is to we will really learn a lot from this, and it will lead us to knowing what changes we need to make, where we need to invest in order to get word out, who did get the payments, who didn’t get the payments, what were the errors. And I hope it creates some umph to get some additional legislative changes to the definition of a qualifying child along the lines of what Jen was talking about. We had proposed at one point, if no one else is claiming the child and you get information from the states that this child is receiving SNAP with this parent, well, then that can be the person who gets the EITC, the Child Tax Credit, etc.
So, expanding some of those definitional things to be more representative in reflecting the circumstances of people. But I think we’ll learn a lot from this proof of concept that will then go into a permanent credit. And I think if we manage our expectations in that way, that will also help to prevent a backlash, if you will.
VALLAS: Nina Olson is the executive director of the Center for Taxpayer Rights. She served from 2001 until 2019 as the IRS’s internal watchdog known as the National Taxpayer Advocate. And Jen Burdick is a lawyer in the public benefits unit who’s recently become something of a tax lawyer, as she was describing, at Community Legal Services in Philly, which is my proud legal aid alma mater. I really, really appreciate both of you for taking the time to have this conversation, which I really can’t imagine having with almost anyone else, given the wealth of knowledge that both of you bring to this issue. And I’m also just really grateful to both of you for the work that you’re doing to try to help everyone figure this out so that the proof of concept is there and can be built upon in the years ahead. Nina and Jen, thank you so much for taking the time.
OLSON: Thank you.
BURDICK: Thank you.
VALLAS: And that does it for this episode of Off-Kilter, the show about poverty, inequality, and everything they intersect with, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas. The show is produced by Will Urquhart. Find us on the airwaves on the We Act Radio Network and the Progressive Voices Network, and say hi and send us your show pitches on Twitter @OffKilterShow. And of course, find us anytime on iTunes or wherever you get your podcasts. See you next time.
♪ I want freedom (freedom)
Now, I don’t know where it’s at
But it’s calling me back
I feel my spirit is revealing,
And now we just tryna get freedom (freedom)
What we talkin’ bout…. ♪