IRS bounces on checks

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  • How did the #IRS fail to use modern payment technology that benefits taxpayers? @AlexBrill_DC

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  • Low participation in #IRS debit card program suggests failure of government in setting up pilot

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  • Details bounce #IRS debit card program aimed to help lower/mid income families

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The IRS issued 119 million tax refunds worth $358 billion to individual tax filers last year; of those, 45 million refunds, totaling $166 billion, were issued by check. Moving that magnitude of money to that many households is no easy task. To lower the administrative cost for the government and the taxpayer, the Treasury Department operated a pilot program last year that distributed tax refunds to low- and middle-income taxpayers through prepaid debit cards hailed as convenient, safe, and cost-efficient.

Many expected the program to be a big hit, especially because it followed other government programs’ success in phasing out payments by check in favor of direct deposits or debit cards.

But Treasury’s initial enthusiasm about the pilot program did not translate into participation—of the 600,000 taxpayers given the option of receiving their tax refund on a prepaid card, only 2,000 chose to do so. Now, Treasury has suspended the program.

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Alex Brill is a research fellow at AEI

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About the Author

 

Alex
Brill
  • Alex Brill is a research fellow at the American Enterprise Institute (AEI), where he studies the impact of tax policy on the US economy as well as the fiscal, economic, and political consequences of tax, budget, health care, retirement security, and trade policies. He also works on health care reform, pharmaceutical spending and drug innovation, and unemployment insurance reform. Brill is the author of a pro-growth proposal to reduce the corporate tax rate to 25 percent, and “The Real Tax Burden: More than Dollars and Cents” (2011), coauthored with Alan D. Viard. He has testified numerous times before Congress on tax policy, labor markets and unemployment insurance, Social Security reform, fiscal stimulus, the manufacturing sector, and biologic drug competition.

    Before joining AEI, Brill served as the policy director and chief economist of the House Ways and Means Committee. Previously, he served on the staff of the White House Council of Economic Advisers. He has also served on the staff of the President's Fiscal Commission (Simpson-Bowles) and the Republican Platform Committee (2008).

    Brill has an M.A. in mathematical finance from Boston University and a B.A. in economics from Tufts University.

  • Phone: 202-862-5931
    Email: alex.brill@aei.org
  • Assistant Info

    Name: Brittany Pineros
    Phone: 202-862-5926
    Email: brittany.pineros@aei.org

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