Starting in July, millions of Americans with children will start receiving periodic payments from the Internal Revenue Service in one of the biggest anti-poverty experiments in decades. This expansion of the Child Tax Credit is a landmark program — and if implemented thoughtfully by the IRS, one that could cut child poverty nearly in half. Yet, achieving this goal requires us to rethink and reimagine the core mission of the IRS.
Over the past year, the IRS has become a social service agency — leading outreach to underserved communities and communities of color as part of our nation’s response to the pandemic. Now, in this next chapter of recovery, the IRS needs to embrace this new role even further — with a bold commitment to customer service, outreach and equity.
The IRS is required by law to develop and deliver a Child Tax Credit portal by July to allow families to update their household information and income, and opt out of the periodic benefit if they desire. This step is important to meet the needs of families in America. But we need to take this effort a step further. We know from the first two relief efforts that not everyone will be able to access the CTC automatically. Up to 8 million households still haven’t claimed their stimulus checks from the past two pandemic relief bills because of systemic barriers.
If this new policy is to live up to its aspirational goals, the IRS will need to take further steps to reach and enroll all those eligible for the child tax credit. And this effort will require significant structural changes in how the IRS approaches its work.
We’ve studied why families don’t claim benefits as part of our work to provide access to free, high-quality tax assistance through our GetYourRefund program. The findings suggest that we need to do much more to ensure equitable access to tax benefits.
Sometimes the issue is simple awareness — millions of families don’t know that they are entitled to cash payments. Other times, the issue is far more complicated, particularly for those who have faced barriers because government services weren’t designed to include them, or for people who are enduring traumatic life experiences. Many people don’t know where to turn for trusted, free tax preparation services. Underlying it all is the fact that we make it far too complicated and time-consuming to file tax returns.
So what should be done?
Partnerships with trusted organizations and government agencies that know how to best reach these families — with an understanding of their needs and community barriers — are essential. These partners can help families upload their information into the CTC portal and answer questions about navigating the filing process. The IRS should introduce its own program to formalize this process, building on the experience of navigators who have helped families enroll in health insurance plans under the Affordable Care Act.
Meanwhile, marginalized families need a free, accessible, simple and trustworthy tax preparation service to help them file. Or even better, offer a new simplified filing method through the CTC portal for families with no or low income, which could be similar to the EIP portal the IRS created last year.
The IRS also needs to greatly advance its customer-facing and backend technology, which it has already begun to develop under the Taxpayer First Act, and ensure that this technology is accessible to marginalized populations.
All Americans should be able to log in to a secure and easily accessible tax account, where they can find their current and past tax information — and documents. They should be able to verify their identity to access these documents, regardless of how robust their credit history is — or whether they have a bank account or stable address.
On the back end, state social service agencies that oversee programs like food stamps and Medicaid should be securely sharing their data on families’ current addresses, income and family composition so it all can be incorporated into the tax accounts. That way, families can access the enhanced CTC without the burden of constantly updating their information as their lives change.
These recommendations boil down to one central point: If we truly want to cut child poverty in half — or better yet, eliminate it entirely — we have to ensure that those who need cash the most have the easiest possible time accessing it.
And to do that, the IRS needs to embrace a radical new approach and enhanced mission.
David Newville is currently the senior program director for GetYourRefund at Code for America and has focused on building financial security for people with low and moderate income over the last decade.
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