Retirees' Tax Info Not Needed For Virus Checks, Mnuchin Says

By Dylan Moroses
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Law360 (April 1, 2020, 6:26 PM EDT) -- Social Security recipients who don't file tax returns will be able to receive coronavirus relief payments without having to file additional tax information, Treasury Secretary Steven Mnuchin said late Wednesday.

Treasury Secretary Steven Mnuchin said late Wednesday that the IRS will use information it already has to distribute coronavirus relief payments to Social Security recipients. (AP)

Mnuchin said the Internal Revenue Service will use information it already has on certain Social Security forms to distribute the relief payments to the program's beneficiaries without requiring them to file tax returns.

"Social Security recipients who are not typically required to file a tax return need to take no action, and will receive their payment directly to their bank account," Mnuchin said.

The announcement followed a letter sent earlier Wednesday by Senate Democrats to Mnuchin and Social Security Commissioner Andrew Saul, asking them to reverse a requirement that federal benefit recipients who haven't filed recently must furnish "simple tax returns" to receive their rebates.

Senate Democrats said in their letter that the administration should use readily available information to distribute the payments to Social Security and federal disability recipients who don't typically file tax returns. It was signed by 41 Senate Democrats including Finance Committee members Maggie Hassan of New Hampshire and Sherrod Brown of Ohio.

According to a statement issued Monday by the Internal Revenue Service, some federal benefit recipients who have not filed tax returns recently would need to furnish "simple tax returns" to receive their rebates, and those requirements would prove difficult to meet for the elderly and disabled, the senators wrote.

The requirement, the letter said, would be especially burdensome on those individuals at a time when the IRS has shuttered many of its in-person assistance centers, suspended some enforcement activities and ordered employees to work remotely. Those measures are in response to the spread of the novel coronavirus, which causes the respiratory disease COVID-19.

"We strongly urge you to ensure that economic stimulus payments are automatically sent to vulnerable seniors and individuals who experience disabilities, without these individuals needing to file a tax return," the senators said.

The senators also noted that H.R. 748, or the Coronavirus Aid, Relief and Economic Security Act, which President Donald Trump signed into law on Friday, provides Treasury with the authority to provide the payments to those receiving Social Security and disability benefits even if they do not file tax returns.

Sen. Josh Hawley, R-Mo., seemingly agreed with Democratic colleagues on Twitter, where he said it would be "ridiculous" for seniors to have to file a tax return to receive their rebates.

"IRS should follow the law that Congress passed," Hawley tweeted Wednesday.

The IRS announcement also drew criticism from the House Ways and Means Committee chairman, Rep. Richard Neal, D-Mass., who suggested that the tax preparation companies that offer free tax-filing products to lower-income earners, known as the Free File Alliance, should assist nonfilers to receive the rebates.

Neal sent a letter Tuesday to Tim Hugo, the executive director of Free File Inc., asking that the companies in the program collaborate with the IRS to make a simplified return available and help provide assistance to nonfilers, Neal said.

Hugo told Law360 that the companies in the program are working with the IRS and Neal to work out a method to get the payments distributed.

Under the CARES Act, the IRS will send $1,200 to individuals and $2,400 to couples filing joint tax returns, along with an additional $500 per qualifying child. The payments will be reduced for those with incomes above $75,000, or $150,000 for couples, and they will be eliminated for those with incomes of more than $99,000, or $198,000 for couples.

--Additional reporting by Stephen Cooper, Joshua Rosenberg and David van den Berg. Editing by Vincent Sherry. 

Update: This story has been updated to include Mnuchin's announcement.

For a reprint of this article, please contact reprints@law360.com.

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