Delays to coronavirus stimulus cash cause angst, confusion: 'This is all just insane'
WASHINGTON — Americans began to receive their coronavirus relief payments in their bank accounts this week, but not everyone was relieved. As of midweek many were angry or perplexed as the Treasury Department scrambled to push billions of dollars out the door to tens of millions of people.
Some confused their stimulus cash with tax refunds because both were coded identically on bank statements as "TAX REF" from the Treasury. Those expecting a bigger refund or a bigger coronavirus payment and mistook one for the other feared they had been stiffed.
Others were upset when they saw their payment was less than $1,200, wrongly interpreting that number as a flat payout rather than the maximum amount a person can get based on their income. Others said the extra $500 for their children never arrived.
Still others complained that the new IRS portal released Wednesday to upload bank information or check the status of a payment was failing. By midafternoon, “Payment Status Not Available” was a trending topic on Twitter with countless viewers venting about their inability to find out where their money is, some with screenshots of the IRS website delivering an error message.
"After long wait times to log in, the system fails to locate the information and after several attempts to retry, it locks you out for 24 hours," Alfred Nordgren, 59, of Philadelphia, said in an email. "Obviously they didn’t test it sufficiently prior to the ‘rushed’ launch!"
Some were frustrated when they heard from friends who got their payments quickly while they continued to wait. For Alejandro Alarcon of Miami, who said he's unemployed and facing growing debt, it was vexing to learn that others who were working in the U.S. on visas got their money before he did.
It didn’t help when he, too, was unable to track down his payment status from the IRS portal.
"This is all just insane," said Alarcon. "I cannot imagine people with literally no savings who are desperate and can't find another way to get this page to work."
The chaos is a product in large part of the extraordinary task given to the IRS, which has faced budget cuts of about 20 percent in real dollars since 2010, at a time when tens of millions of Americans are desperate for speedy relief during an economic calamity. The payments are a lifeline for cash-strapped families who are struggling to pay rent or mortgage or put food on the table as joblessness shatters records with some 17 million claims in just three weeks.
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U.S. citizens and residents with a valid Social Security number are eligible for payments of $1,200 per person if they earn less than $75,000 (or $150,000 for married couples). Those who have submitted bank information to the IRS are poised to get their money faster than others like Alarcon, who have not sent the IRS information for direct deposit in recent filings.
The IRS responded to the pushback, saying that by midday Wednesday the website had provided payment status to 6.2 million taxpayers and received the banking information of nearly 1.1 million.
“IRS is actively monitoring site volume; if site volume gets too high, users are sent to an online ‘waiting room’ for a brief wait until space becomes available, much like private sector online sites,” the agency said in a statement.
Treasury said it expects more than 80 million Americans to get their payments in their bank account this week.
Marc Savage of Middletown, California, may have to wait a little longer. He hasn’t sent the IRS his bank information in recent returns because the TurboTax system doesn’t include that option when a person isn’t getting a refund.
And the IRS website wouldn't allow him to input it on Wednesday. Savage said he tried multiple times to access the new IRS website to upload his bank account number but he was locked out and was unable to reach the agency for answers.
"Total dysfunctional mess," he complained in an email.
The Treasury Department confirmed this week that President Donald Trump’s name would appear in the memo line of the paper checks. The decision broke with precedent and drew fire from critics who accused the president of cynically exploiting the payments, which were unanimously approved by Congress, to boost his re-election prospects in November.
In some cases, the Trump administration shifted policy to simplify the process for Social Security beneficiaries and Supplemental Security Income recipients, bowing to pressure from seniors' advocates by announcing that eligible people in those categories can get the money without filing a tax return.
One policy demand the administration has not acceded to came from a group of Democratic senators, who urged Treasury to prohibit banks from seizing the payments for debt collection. Sen. Ron Wyden, D-Ore., criticized Treasury after the American Prospect first reported that regulators aren't stopping banks from steering the stimulus cash to pay an individual's outstanding obligations.
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"We strongly urged the Trump administration to put the interests of workers ahead of the interests of predatory debt collectors," Wyden said in a statement to NBC News. "It's unconscionable to allow predatory debt collectors to pocket these payments in the middle of an unprecedented economic crisis."
The initiation of payouts also came as an unwelcome surprise to those who learned they'd be excluded from the automatic payments, including Americans who owe back child support, six-figure earners who just lost their jobs, and those who had a child born in 2020 and will miss out on the extra $500.
In some cases, the problem with using tax returns dating to 2018 to determine automatic payments was evident. Scott Gustin of Nexstar Media, a network of television stations, reported on Twitter that his deceased grandmother had received a stimulus deposit.