Conclusion

The Biden administration has already shown its ambitious intentions to update the American social contract, and to build a government that truly takes care of those in need and plays a central role in breaking down inequities. In a country where an enormous portion of the social safety net runs through the tax code, building the IRS into a world-class benefits administrator is critical to these efforts.

As much as the IRS has gone to great lengths to get benefits to people who need them, and as successful as low-income tax credits have been over the years in reducing poverty, the government can still do more. In the short term, it can reach out aggressively to non-filers and especially those who are incarcerated, and create simplified ways for them to claim credits; it can automate economic impact payments to federal beneficiaries, incarcerated people, and workers with stable addresses; it can use automation and targeted outreach to ensure tax filers get all the credits they deserve; and it can ensure a larger portion of funds get to their recipients by using accessible payment methods and opting not to garnish anti-poverty benefits. In the medium term, it can create a truly free and painless modern tax filing experience, bypassing tax preparers and saving low-income families hundreds of dollars. And in the slightly longer term, Congress can restructure these programs, making them comprehensible to everyday families, consistent with lived experience, and amenable to still greater automation.

Taken together, such measures would be transformative, getting billions of dollars in benefits to millions of families who deserve them, delivering the full value of benefits to tens of millions more who today receive only a portion of what they are entitled to, and making tax filing—a stressful and often expensive experience—essentially painless for tens of millions of Americans. This is the responsive, twenty-first century IRS the nation deserves.