IRS says its own error sent $1,200 stimulus checks to non-Americans overseas | Hacker News Reader

IRS says its own error sent $1,200 stimulus checks to non-Americans overseas

npr.org

223 pointsbrundolf170 comments

I feel like there is a disproportionate focus on relatively small dollar errors and fraud. The point was to get money to people who need it and to keep the economy from collapsing for everyone. Setting up mechanisms to try to catch every mistake would probably have cost more money than it would have saved and definitely would have unnecessarily delayed people getting checks. The stimulus was too small and too slow to begin with.

Yes - this was a $2.2 trillion dollar relief bill and the total amount in question is well under $34 million (that number included Americans living abroad). That’s smaller than the amounts individual businesses claimed inappropriately and delaying sending the checks to check all of the recipients would probably have cost more since a lot of that money went straight into the economy paying taxes and keeping people employed.

It was actually much larger. 5 trillion was made to only look like 500 billion, using a technical trick.

Of the 2.2 trillion, 500 billion was set aside for whatever. This was often reported as the part for big business. Actually it's 500b to seed new special purpose banks that can operate with 10 to 1 leverage. So the 500b is actually 5.5t, making the whole bill several times larger than widely discussed.

I'm reminded of the "chain CPI" fiasco where Congress tried to reduce Social Security, but hid it in a technical detail. Except this time Democrats were on board. Neither party challenged the main narrative, and so the media didn't bother to either.

Do you have a source on this 500b allocation? Not finding anything on a quick search.

Not OP, but found this:

https://indivisiblesf.org/blog/2020/4/28/the-cares-act-will-...

> the CARES Act may end up serving as the second largest transfer of wealth from the working class to the wealthy in our lifetimes.

how is that a technical trick? $500 billion is what'd come out of the treasury, which is what matters. I'm certain some of the $1200 checks were put in banks, which they went and turned around into loans at whatever the current fraction is too...

More than that; the entire point of the $1,200 was to get people money quickly to buy time to work out a longer term solution (some of the proposed longer term solutions happened to involve some form of ongoing stimulus checks modeled after the initial one).

And instead what we got was the PPP and EIDL, the majority of which ended up going to huge corporations (I know Ruth's Chris returned it after the staggering public backlash). And those of us on this forum just worked from home and continued getting our paychecks. I don't know a single person that lives paycheck to paycheck in a working or middle-class job who got anything more than that $1,200.

I don't think the $1200 helped that much, A large chunk (33%) of the money was saved and another chunk invested. I think politicians and media oversold the efficacy of stimulus.

Apparently, many of the middle class invested in the market according to reports [0]. Maybe not the best form of savings for some, but I’m not here to argue one way or another.

[0] - https://www.cnbc.com/2020/05/21/many-americans-used-part-of-...

And collectible cards (baseball, basketball, football, pokemon, magic the gathering, etc). The card market exploded upward during the pandemic. (existing asset bubbles from low rates + $1,200 onto the fire + people stuck inside = huge shot of demand from buyers of cards; it wouldn't do much in the million dollar art world, however most cards are obviously more in the affordable range as it pertains to a $1,200 injection).

The stock (CLCT) for the largest card grading service went up 200% over the past year, after hardly moving the prior four or five years.

The one time $1,200 payments were more of a campaign thing than practical policy - remember the physical checks signed by Donald Trump? The real relief package was in the unemployment insurance (the federal government added $600 a week to unemployment payments - huge in poor states where unemployment might be only $250 a week maximum) and in the payroll "loans" that will mostly be forgiven because they went to, well, payroll.

Edit: Maybe my editorializing wasn't well received, but the facts are correct regardless:

The spending primarily includes $300 billion in one-time cash payments to individual Americans (with most single adults receiving $1,200 and families with children receiving more[5]), $260 billion in increased unemployment benefits, the creation of the Paycheck Protection Program that provides forgivable loans to small businesses with an initial $350 billion in funding (later increased to $669 billion by subsequent legislation), $500 billion in aid for large corporations, and $339.8 billion to state and local governments.[6]

> A large chunk (33%) of the money was saved

Another term for 'saved' is 'spent slowly'.

And the benefit of that is a discussion worth having, but the point of the $1200 was to inject it into the economy during the height of the shutdown. Having it spent slowly over the course of a year or more doesn't help the waitress getting tips when the restaurant she works at is operating at 25% capacity in May. In this context specifically, money being saved or invested is a failure.

>And the benefit of that is a discussion worth having, but the point of the $1200 was to inject it into the economy during the height of the shutdown.

That could have been a point. However the important and highly cited purpose was to provide assistance by 'getting cash into the hands of Americans that need it' (following job loss, etc). The point of assistance is to assist the recipient.

Unpopular opinion, but I didn't really have a problem with corporations taking PPP money they were legally entitled to. The problem is that Congress didn't do enough for everyone else.

The PPP program concluded with $130 billion still in the bank. What a waste!

The tragedy of the PPP is going to be the companies that took the money, spent it on something other than payroll, and then collapsed or accounted their way out of repaying it. Unfortunately it's harder to get people to care about those abuses than the companies that didn't "need it" but still took. Americans are always so disproportionately concerned about moochers rather than grifters.

> Americans are always so disproportionately concerned about moochers rather than grifters.

That's by design, sadly.

FWIW unless you meant "unmarried, living without family members", the benefit was indeed higher for many households.

As an example, a family with two middle-class wage earners and 3 kids received $6,000. For a total household income in the "middle class" range, that's a nice bump.

Yes. It’s as if sending out hundreds of millions of checks during an unprecedented economic crisis might be somewhat of a challenge for the people who have to make it happen on an instantaneously urgent basis...

Yep, this exact point is addressed in the article as well

>"It's awful when we hear of millions of dollars going into the wrong hands," he added, "but it was probably within a somewhat acceptable threshold of error or margin of error" because Congress opted for speed over accuracy when it flooded the U.S. economy with money last spring

I also remember at that time hearing talking heads saying things to the effect of "we are getting money out to everyone now, we'll worry about collecting it back from people who aren't eligible later."

IIRC some federal government money can be withheld if you owe the IRS and most of these recepients seem to be collecting social security so it seems just docking future SS payments to collect back the $1,200 might be the best solution. Even if it can't be collected that way with existing laws, Congress can always pass a law allowing it. Though many checks might not be cashed in the first place if the recipient didn't have an American bank account.

But the checks have long stopped yet the economy has not collapsed. THE S&P 500 made new highs. Corporate earnings are still very strong. Although unemployment is higher than usual, the economy is far from collapse or recession. The 3 quarter GDP up 33% and forecasts for q4 and 2021 remain strong in spite of checks stopping. This narrative that the economy hinges on stimulus checks is part of the media and political spin.

Food insecurity and food bank use is at record highs among US residents this year. That's a considerably better indicator of real economic health than any index.

https://www.theguardian.com/food/2020/nov/25/us-hunger-surge...

It appears the economy has ascended to the paperclip-maximiser stage where it doesn't actually need people not to be starving.

Only if you conflate "The Dow" or "The S&P 500" as the "economy." People who only watch the number go up think things are going well, while people who look at how real people fare in this crisis think things are going poorly.

Yeah, why aren't people out celebrating that DOW hit 30k or so?

Maybe because all those metrics have almost no correlation how a below median income household operates.

Stocks are only an indication on how the rich are doing.

Why don't you ask the waitress at Denny's who's had her hours cut in half how the S&P 500 affects her?

Ironically, the idea you're pushing, something like "this doesn't really matter, the important thing is the government giving people money, the more the better, who even cares if they're American," precisely represents the best objections to the welfare state. Which are its shoddiness, its lack of administrative rigor, and so on. These objections raise the question: can a welfare state be effective if it's administered so poorly? If the American government is sending money to Swedes, can we trust it to send money to "people who need it"?

Does Sweden send welfare checks to Americans who aren't Swedish citizens? If not, perhaps that partly explains why the Swedes are more comfortable with an expansive welfare state than Americans.

I think it’s important to remember that one of the goals during this process was speed. The government could surly be more accurate in their distribution of the 1,200$, but it would come at the expense of time. Getting the stimulus check in 2021 would be worth way less.

One error in 10 thousand is not shoddy at all. I bet it would cost more than $1200 eliminate each of those errors.

> the idea you're pushing, something like "this doesn't really matter, the important thing is the government giving people money, the more the better, who even cares if they're American,"

I'm almost unsure how to reply because you seem to ignore the central point of the comment you're replying to. Your characterization omits the most salient point: That it had to be done fast. I don't see how the tradeoffs in emergency distribution of funds are in any way indicative of whether you can trust welfare states to be administered properly or not. The comment was precisely about "lack of administrative rigor" being warranted in favor of preventing greater harm.

> Does Sweden send welfare checks to Americans who aren't Swedish citizens? If not, perhaps that partly explains why the Swedes are more comfortable with an expansive welfare state than Americans.

I don't understand how this point relates to the general value of welfare systems that you are discussing. Are you saying an American welfare system has to be inherently less reliable? Or that there are more Americans than Swedes so statistically Sweden will receive more accidental checks from America than the reverse? Could you elaborate?

> I'm almost unsure how to reply because you seem to ignore the central point of the comment you're replying to. Your characterization omits the most salient point: That it had to be done fast.

It had to be done fast, and it had to be handled by a department that's chronically underfunded due to decades of underfunding fueled by all the political hand-wringing for which terms like "welfare state" have become watchwords.

One could mount an argument that that's irrelevant, the real problem is that the IRS is being asked to do something like this in the first place, and there would otherwise be no need to have an organization that's well-funded and competent enough to handle things like this quickly and accurately. I personally find those sorts of arguments specious, though, by virtue of being anti-democratic. This is not Plato's Republic, and we do not get to rely on infallible philosopher kings to make our decisions. As long as there is a plurality of opinions, and as long as opinions change over time, there will always be this sort of tug-of-war and sloppiness as the policy decisions being made now interact poorly with the policy decisions that were being made at other times.

Or perhaps I should say ademocratic? It's arguably sensical to think, "Everything would work great if it just went my way," but it's best to relegate that sentiment to the world of political thought experiments. Taking it as an unstated major premise in an actual political discussion about current policy decisions in a functioning democracy is painfully impractical. It's just like code: If you try to deal with a messy legacy system by closing your eyes and blithely steamrollering along with your own clean, modern code, the end result will not be more clean and modern. It will just be an even bigger mess.

Yes, the parent comment was about "lack of administrative rigor". The cheerful acceptance of that situation was the topic of my post.

There is no reason why someone can't support the welfare state and also demand efficiency. That demand represents an ideal; there will always be errors, but the insistence that all errors are unavoidable and that (as the parent suggested) we shouldn't even talk about them is extremely irritating. It provides the enemies of the welfare state with the best possible arguments ("you don't even care if the money is going to people who need it").

It's more that such a focus on 'efficiency' actually in practice comes from people who either place an extremely high moral cost on cheats or mistakes (far greater than the actual monetary cost of such issues), or from (more cynically) those opposed to the goals of such institutions in the first place (i.e. they believe the welfare itself is wrong and even those allowed under the rules do not deserve it). This is born out in the reactions that such critics tend to impose on the system, i.e. imposing draconian and expensive checks on those who seek it, both rejecting or impeding legitimate claiments while also not demonstably reducing costs (any savings due to catching fraud or even just rejecting those who need it being swallowed up by the cost of the checks).

See the UK government's current (over the last 10 years) approach to welfare. Lots of money spent on checks which are run almost seemingly malicously incompetently, the vast majority of rejections not being upheld when they go to court (even more expensive), assuming the claiment hasn't died by then (as many have due to extreme poverty).

It's the kind of argument which carries a lot of emotional weight (everyone hates a cheater) but it's really hard to believe is being taken in good faith from a rational, cost-reduction perspective.

> Which are its shoddiness:

I mean, they sent what, $34m overseas erroneously of $2T?

Doing some quick napkin math, for every $1,000,000 spent, $10 accidentally went overseas?

Why does this seem poor to you? That seems like less than a rounding error in a rounding error....

> I mean, they sent what, $34m overseas erroneously of $2T?

Far less. That $34m included disbursement to non-resident US citizens. Considerably more than 28,333 US citizens live overseas. I have had to file tax returns for 10 years despite not living in the US and having no US income, you bet your ass I cashed that check.

Sure. So it's an order of magnitude less? Two? That's $1 in a $1M? $1 in $10M?

Objecting to social programs because they have minuscule errors drives me up the wall.

> Objecting to social programs because they have minuscule errors drives me up the wall.

It makes sense if you consider weak people to be exploitable material for powerful interests. Social programs interfere with that dynamic - ergo the endless propaganda and demonetization of compassion.

I should have said "supposed shoddiness".

My point was not that the welfare state is shoddy but that, if you support the welfare state, mistakes like this should bother you more, not less.

> if you support the welfare state, mistakes like this should bother you more, not less.

Why? I support social programs, I accept some inefficiencies and waste.

In general I think small waste is not worth the energy to be concerned about if the benefit is huge.

That said, I think means testing is a waste of everyone's time. Just provide the benefits to everyone -- it simplifies the process of providing the benefit.

Because, as I said in my original post, "[shoddiness, etc] represents the best objections to the welfare state".

In other words, blithe dismissals like "I accept some inefficienies and waste" provide the other side with the best possible ammunition against the idea of a welfare state.

It's laughable to see the number of people here who, straight-faced, say nonsense like "Nitpicking efficiency is for the capitalists".

If you're looking for government waste and inefficiency, you'd be better off looking at military spending. That's where a lot of the low-hanging fruit is.

> if you support the welfare state, mistakes like this should bother you more, not less.

This doesn't follow at all.

As long as the policies are progressive (in the economic sense) and enough money gets to those who need it, why should small inefficiencies bother me? Nitpicking efficiency is for the capitalists.

False. If you support effective government, welfare state or not, learning of this mistake should be considered a sign that they may have hit the right balance between spending on implementation and spending on platinum grade superpowered mistake detectors. One big obstacle to a welfare state is the unhinged obsession with not giving anyone anything they don’t deserve, which leads to idiotic programs that spend more money drug testing applicants than helping them.

As others have pointed out, the cost of the mistakes is a rounding error.

If you spend $100M to reduce waste by $34M, then did you actually reduce waste?

> Does Sweden send welfare checks to Americans who aren't Swedish citizens?

Generally, yes, if they worked for some time in Sweden. There is probably a non-zero error rate associated with that too. It's not like the gov't is sending checks to random Swedes - they were sent based on available sufficient tax criteria not originally intended to be used for entitlement distribution.

I do suspect most countries wouldn't have a problem on the scale the US might because a) they have larger, simpler entitlement programs (qualifications tend to be based on a a small number of straightforward residency classes), and b) they do not generally process any tax paperwork from non-residents. It is the US's stinginess and paradoxical fear of inefficiency that hurts it here.

I don't agree that the effort was shoddy and I don't think any errors made in standing up a new government program in a matter of weeks, with a mandate to move as quickly as possible, and in the middle of a pandemic say anything useful about the concept of welfare in general

> shoddiness of the welfare state

It works out to $10 erroneous dollars for every $1,000,000. That's 99.999% accuracy and that doesn't sound shoddy to me at all.

I think the real irony here is that the best rebuttal to your point is the exact comment that you replied to.

The amount in question is less than 0.0011%. Literally a thousandth of a precent.

Meanwhile the result was keeping hundreds of millions afloat of Americans (at least until we decided to abandon them again for the sake of politics)

Besides, since when is a leaner government protection against an incompetent government? We're literally watching thousands of Americans die as proof this theory of "the less my government does the less it can do wrong" is completely nonsensical

In the Nordic countries, people often know personally someone who has managed to live on the dole for years and years in spite of being totally able-bodied and capable of working; the person would simply prefer to spend their lives playing video games or toking or whatever. That is rather unfair and that person might be called a leech, but still few would want to rock the boat and end the welfare state just to eliminate those cases. So, indeed, in the Nordic countries people are prepared to accept some fraud and mismanagement to keep the overall system going.

I have to agree here, having family on welfare in the U.S. Try living like that sometime, its terrible. You will have to live in a terrible neighborhood, with not enough money to survive on without resorting to taking handouts from charities like foodbanks. If someone wants to scam the system and live like that their entire lives let them, if that means that people using it to get back on their feet have a safety net.

Completely agree. The real scandal has been egregious unemployment claims fraud. Hundreds of millions from California alone, and multiple states have been targeted[0].

[0] https://www.nytimes.com/2020/11/24/us/california-unemploymen...

I'm frankly much more concerned about the people who were incorrectly denied unemployment they deserved.

That's undercounted too, as they would only report the fraud they already uncovered. People outside the US are taking advantage and that money is gone: https://krebsonsecurity.com/2020/05/u-s-secret-service-massi...

There's also fraud from the money that's supposed to go to small businesses. My family lives in Chicago and it feels like their entire neighborhood all got $10,000 by pretending to be small businesses, and they teach each other how to do it. Everyone they know has gotten money from that and its become a meme ("did you buy that coat with your 10K check?"). My family is trying their best to resist also throwing in some applications to just get a piece of that.

Well, this is only one error in one program. Do you think an organization that makes this kind of mistake will make only one? And if it makes more mistakes, how likely is it that the IRS will find them and reveal them?

I recall a story about a Congressional Oversight effort to audit for misused funds. They ended up finding something like $100k of sketchy expenditures, but the audit itself cost multiple millions of dollars.

Retail tries to keep 'shrinkage' to a number that is below the threshold of detection to a point they can just built it into their cost models and not worry too much about the rest.

This story is constantly repeated in different variations on the theme. In Florida they decided to drug test people who were getting food stamps but they didn't find anybody because, surprise, poor people can't afford drugs, and they spent a fortune on the drug tests.

Stuff like this is a feature, not a bug. It's job creation for administrators and drug test labs, and a disincentive to apply for food stamps.

I think mostly the latter. Just like how strict voter ID laws are intended to disenfranchise certain voters who don't have ready access to photo ID.

Who exactly are they intended to disenfranchise, I know the common trope is that black people are unable or unwilling to get an ID, but that in and of itself is a pretty racist implication. Any US citizen can go to their local DMV and get a state issued ID.

What it does do, is restore just a small amount of confidence in the election process, something that is woefully lacking, people are so disillusioned with how far the divide in the US is, that half of them believe the Russians planted the current president via election fraud, and the other half believed that the current president's loss in the recent elections is invalid due to fraud.

Lack of confidence in elections, eventually leads to revolutions, voter ID is a small token of a way to restore some of that confidence and to assume people are too poor or uneducated to get a state issued ID, is "White mans burden" under a different guise.

Many people live hundreds and hundreds of miles from the nearest DMV. Other people live in jurisdictions with millions of people and only one DMV office, because the DMV is a state, not municipal agency. Others lack the documentation necessary to obtain an ID by modern standards, because at the time of their birth their state or county didn’t bother documenting births of people of their race.

Voter ID laws may not be inherently racist, but they are designed by racist people to disproportionately impact black Americans.

Ummm.... I hate to point this out, but Trump's base is rural America. "Many people live hundreds and hundreds of miles from the nearest DMV" describes the Republican base perfectly.

I mean, I'm not necessarily disagreeing with some of the big-picture conclusions, but the logic along the way is a long bit... off.

Trump's base is too large to be rural. That's the thing about the country: nobody lives there. If they can disenfranchise millions of urban people then they will happily accept also disenfranchising a handful of rural people.

From an argument perspective, consider the contradiction between "Many people live hundreds and hundreds of miles from the nearest DMV" in your first comment and "That's the thing about the country: nobody lives there. If they can disenfranchise millions of urban people then they will happily accept also disenfranchising a handful of rural people."

When you have that kind of obvious cognitive dissonance, it should be an obvious sign you believe something false.

On a mile-high level, two things to consider:

1) Your base are your core, key supporters. They're the people who are 100% committed to voting for you, go to rallies, make small donations money, volunteer, and man phone lines. You can't run an effective campaign without a base.

Trump's base is rural America and displaced predominantly white workers in decaying manufacturing cities. Fox News swings between playing clips of democratic elites calling them "privileged whites" and "racist redneck trash."

2) On a national level, in turns of number of votes, it doesn't matter much how many people live in smaller states. Whether it's one person or a half-million people, they get three electoral votes. Appealing to that base is a good tactic.

I believe you're sincere, so I'll address each of your points in turn.

> half of them believe the Russians planted the current president via election fraud

> the other half believed that the current president's loss in the recent elections is invalid due to fraud.

The first half believe there was malign Russian interference on social media and direct collusion with the campaign. The second half believes mail-in votes were fraudulent. Voter ID would not allay either of these concerns. But let's not get bogged down in details, because I understand the wider points you're trying to make.

> the common trope is that black people are unable or unwilling to get an ID, but that in and of itself is a pretty racist implication

Not black specifically, but urban, working poor and the homeless. And it's not racist, it's rooted in facts.

> Any US citizen can go to their local DMV and get a state issued ID.

This costs time and money. At my local DMV in California, any interaction takes 2 hours of standing in line. That's not counting the time it takes to get there and go back to work. For a person without state ID means taking the bus or riding a bike or walking.

Working poor people are hourly workers, and DMVs are not open outside of normal working hours. So a working poor person must sacrifice half a day's wages to apply for an ID. And that's if all their documentation is in order the first time (don't scoff; I've had to go back multiple times because I was missing something or the official made a mistake).

Compared to that, an office worker can easily take a half day off with no loss in wages. Is this not a regressive tax in order to exercise a fundamental right?

> What it does do, is restore just a small amount of confidence in the election process

That's the stated reason for voter ID laws. However, good, fair, voter ID laws would also make provisions to ensure that the poor are not disproportionately affected by this new requirement. They'd keep DMVs open for longer or on weekends (in fact some states did the opposite after passing voter ID laws - by closing DMVs or reducing hours). They'd waive fees for low-income people. They'd automatically register graduating high schoolers - do it the same day as yearbook pictures. They'd let volunteers supervised by government employees run voter ID registration stations at grocery stores, churches, and community centers on weekends and evenings. Collecting documents and taking pictures isn't particularly hard - you could get some Boy or Girl Scouts to take ID pictures for merit badges.

Given the hyper-partisan nature of American politics, a good voter ID law has a very small chance of being passed anywhere. The point of voter ID laws, as they are written today, is to suppress the urban poor vote. So the side proposing the laws has no incentive to help the urban poor get voter ID. And the side opposing voter ID laws takes umbrage to anything that adds friction to getting voters in the booths on election day, fearing (rightfully) the intentions of such efforts.

How do you solve all this?

To me it does not seem all too hard of a problem to solve. I don't know about other state but in FL you can get your driver licence, tags, and most other FL DOT related functions at the local tax collector's office.

There is no doubt that their are inefficiencies in the process but, it is after all government services, their is no incentive for them to perform better or to provide a decent customer experience because they hold regulation and a monopoly on the process. I get it, I mean in FL they won't take your old licence (if it is expired) as proof that you are you, even though they issued it and can verify that while it is expired, it is an official id that they issued. I know because I had to deal with it, as well as deal with the fact that at some point they stopped recognizing hospital issued birth certificates, that did not have the state encoding strips on them. That being said, inefficiency of government does not invalidate the need to restore faith in the election process on several levels. Rather it means we look at ways to make it more efficient and change the incentive process to do so.

I don't disagree that these items could be distributed to other trusted entities. I mean I would be all for the poll watchers being able to take the documentation and issue the ID right there on the spot at no charge.

And I don't disagree that there are a lot of agendas at play, but I honestly don't know how people come to the conclusion that the average minority /poor will be disenfranchised by this. I cannot speak to whether it would disenfranchise the homeless as I would hazard to guess that not many among it's community actually vote. I know where I live (The Florida Keys) we have a very high homeless, working poor and transient population. Most of those that actually work, posses some form of state ID, but I could not say for the homeless that panhandle.

I am all for making it as frictionless as possible and I agree on fees for the poor, but I just don't see the racist implication which is generally what I have heard bandied about in the dogma. I personally see it as a valuable step towards election integrity and that is my primary concern. No one is letting off the gas, and given how insulated we have been in the US to political strife, I don't think the majority of both sides sees how close we are too the edge of the cliff, but everyone just wants to keep the pedal down. We will not go on long with lack of faith in our representatives being duly elected and the less faith people have the more prone they are to wild conspiracies of Russian hookers peeing on candidates, and pizza parlor pedo houses. We truly are at that level of crazy, and that level of crazy makes people easy targets for manipulation.

The multimillion dollar audits for $100k of corruption makes perfect sense to me.

The goal isn't financial but cultural. You don't want a corrupt culture. At the time you've hit billions of dollars of corruption, it's like termites hollowing out your house structure or COVID19 shutting down your country for 9 months. If killing those first few termites costs THOUSANDS OF DOLLARS or you were spending A MILLION DOLLARS for each COVID19 case coming into your country to definitely get it under control, it's a bargain.

The problem isn't how it was handled ex-post. The problem is how there was essentially zero infrastructure or preparation in place for this type of fast-disbursement of stimulus.

Surely it couldn't haven been inconceivable to imagine that Congress may want to send widespread stimulus to most everyone with a week or two or turnaround. The 2008 financial crisis was barely more than a decade ago. How hard could it possibly be, in 2020, to setup a secure, cross-verified, system for taxpayers to update their information online?

Defending the incompetence of the Treasury Department, is like defending a cook who burns down the kitchen because he never inspected his fire extinguishers. "What did you expect the guy to do? He had to move fast!"

Whether Congress could want to do something or not is irrelevant to the civil servant. Unless they're directed to make those preparations (and not just plans for the event, but actually start implementing which costs a lot more), they won't.

The distinction I'm making: A plan may take 1-4 weeks to form with 1-10 participants. They could tell you exactly what's needed in order to implement a stimulus check program like this safely and accurately. But the implementation is going to take weeks or months more work and 10-1000 participants to effect it.

The planning is "cheap" and done as a matter of course. That covers things like disaster recover and conops. But it doesn't, on its own, actually create a final "product". Only the plan for what to do when an emergency or directive comes down the pipe.

The implementation is expensive. And they need authority to execute it. If they're not funded for it, they aren't going to do it.

> How hard could it possibly be, in 2020, to setup a secure, cross-verified, system for taxpayers to update their information online?

Pretty difficult. People don't want to update, don't have access to computers, some are here living and working and aren't citizens or are undocumented, some people don't trust the government or don't want the government tracking them anymore than they already do. You name it.

Even if you didn't have these systematic issues, it's a political football. Can't ask the wrong questions on the census b/c politics, for example. How would you even know that every American eligible got a check if you can't even get a count of every American?

>The problem isn't how it was handled ex-post. The problem is how there was essentially zero infrastructure or preparation in place for this type of fast-disbursement of stimulus.

Isn't there? The Fed (and monetary economists) always talk about how much easier it would be to stimulate with a "helicopter drop"[0], wouldn't they already know how to pull that off?

Even if it were done by Congress rather than the Fed, the Fed's process could still be the delivery mechanism.

[0] https://en.wikipedia.org/wiki/Helicopter_money

If you want the government to be capable of something you need to spend money on that capacity. Having efficient systems in place come with a real cost, so simply saying their less than perfect isn’t enough you need to justify the waste vs what it would have taken to avoid it.

If your point is that Congress should allocate additional funds to the IRS to improve their infrastructure, I couldn't agree more.

Decades back, Congress starved the IRS of infrastructure funds as a means of kneecapping it. Innovative programs (IRS-CAWR, etc) were prototyped, hugely successful (first year brought in several $100M for one service center), but then nationwide rollout was dragged out for years for lack of HW.

I doubt much has changed and things are cobbled together. Like all large legacy environments, reimagining is costly, complex and prone to high failure rates. They should never move off the mainframe.

Exactly and we needed this to be $600 monthly. It also sucks that a lot of individually owned small business weren't eligible for this stimulus.

I came to make the same point. Speed was more important than accuracy. These types of articles are just cheap shots that make the program look bad, when in fact it was an unmitigated success.

There is, and it's because there is a segment of the population that has been indoctrinated to believe that the government provides no useful function other than criminal prosecution and military services. Any waste or small errors (in the larger scheme) are an alarming cause for concern in their minds and proof that government is dysfunctional by default.

And this is the argument for the U in UBI. You make government services as universal and as easy to acquire as possible. You get more widescale buy-in from the general population because everyone benefits rather than a select group which seems to be a problem with the current discussions around college loan forgiveness. Plus there are all sorts of cost savings that come from reduced bureaucracy that hopefully outweigh the costs from outright fraud or normal mistakes like this.

All the scrutiny and bureaucracy should be on the tax collection side rather than on the service side.

As with anything with government and helpful programs, a large part of the US thinks, 'It doesn't matter that millions are helped, that a handful was able to take advantage means we should get rid of it'

This is nothing compared to how much money the Army loses over seas. Here is a case of 70 billion of literal pallets of cash going 'missing' [q] [y] [z]

[q] https://www.stripes.com/blogs/stripes-central/stripes-centra...

[y] https://www.reuters.com/article/us-iraq-usa-cash/u-s-sent-pa...

[z] https://www.nytimes.com/2014/10/12/world/investigation-into-...

I never know what I'm supposed to do when I gain this kind of information.

Nothing is really going to change in my life time regarding the government of the United States and its inefficient spending, is it? No matter who we vote for or what we believe is right... it's pretty much always going to be the same story with the same problems and overall no change, right? Is it worth reading about/getting worked up over?

Please read the linked articles again. They do not say that $70B went missing. Afghan & Iraqi national banks had money in US banks. They requested the money so the US banks sent it. The US military delivered it.

One Danish newspaper covered this when the checks arrived earlier in the year. The issue they focused on was the fact that the checks are basically worthless. Most Danish banks had no idea how to handle them.

Part of the problem is that checks where fased out almost four years ago. To handle the checks the banks would need an American partner bank, but it’s still more trouble that most banks are willing to deal with and they aren’t obligated to cash in checks anymore.

Same situation here in Sweden. Nobody would take it. We set up a Facebook group to find solutions, the easiest one being just getting a US bank account. It's really considered a stone age system here.

Most banks are even wary on having emigrated Americans as customers, as that is also a lot of headaches. (One of few countries where one still in theory have to tax even when no longer living there)

Meanwhile, actual US citizens who were married to somebody with an ITIN (for example, my wife is in the process of getting her immigrant visa and green card), got $0 stimulus money whatsoever. Apparently the administration was trying to punish people married to illegal immigrants, and all the people suffering through the legal and extremely slow immigration process get bundled in with them?

Yes, it also penalized attending college.

It seemed to work for those with a green card, at least, though I was sort of worried that it would be counted as 'public assistance' for the purposes of the 'public charge' rule that's now being enforced. Seems that it's not being considered as such, though, at least according to the lawyer I talked to.

So long as you got your SSN (which I hear are printed much faster than green cards) you should have gotten it. Thankfully public charge rule is on the way out, and I wish you a smooth journey to citizenship without that policy looming much longer :D

Nah, the public charge rule refers to a specific set of federal benefits. This legislatively created extra tax refund is not one of those.

I figured that it would make no sense to count it as such, but I also thought it made no sense to require every field on each immigration form to be filled out.

With PDF form validation being what it is, I wouldn't be surprised to see people listed as having 5 kids named NA NA NA in USCIS records in the future.

Claim it on your taxes... the $1200 was just basically a tax credit given ahead of time. If you qualify, you can claim it in January... won't help you today :(

But they don't qualify, that's the point. If you have an ITIN you don't qualify for this kind of tax credit.

The rules are even weirder than that. The advance tax credit doesn't have to be repaid even if 2020 income makes one qualify for a smaller amount than actually received or for no payment at all. But if 2020 income is low enough to qualify for a higher payment, you do get to claim the difference on the 2020 tax return.

Even weirder, if your payment would be different between 2018 and 2019 income, the actual payment the law granted earlier this year depended on which returns had been filed at the time the IRS determined eligibility, with no adjustment for subsequent filings.

I qualified for my full payment based on my 2018 income, would not have qualified for anything based on my 2019 income, and did not expect to qualify for 2020 either (although the impact of the pandemic means I actually would). I made sure not to file my 2019 tax return until after I got my payment.

Very badly designed legislation, though there may not have been much alternative if they wanted to act quickly.

Well huzzah for year over year poverty. Being caught outside of the spotty economic recovery (trumpeted by media+pols as being widespread and holistic) finally paid a dividend.

>Apparently the administration was trying to punish people married to illegal immigrants, and all the people suffering through the legal and extremely slow immigration process get bundled in with them

They say that, but under Stephen Miller almost every single aspect of legal immigration has been made harder, slower and more expensive than before. After all Steve Bannon said the high number of Asian CEOs in Silicon Valley is not compatible with a civic society and that it's worth it for the US to lose economically while restricting legal immigration.

So what you encountered was a feature, not a bug.

Now, that may be the media soundbite, the actual numbers may surprise you.

In 2015, under the obama administration, out of 531k immigrant visas (green cards), only 21k were for employment based categories, with 8600 for investors (visas for sale), and only 11k for EB1,2,3 categories (that is high skilled employees of companies and academics/professors in universities).

In 2019, out of 462k green cards, there were 28k employment visas, with 16k for EB1,2,3 categories.

So, an asian would have a better opportunity to get a green card and subsequently become CEO under the trump administration. Both republcians and democrats want this feature of preventing high skilled immigration.

[1] https://travel.state.gov/content/dam/visas/Statistics/Annual... [2] https://travel.state.gov/content/dam/visas/Statistics/Annual...

FYI as an immigrant on a visa(so im attuned to this stuff) availability of visas and greencards lowered drastically in 2020. Some of it was purportedly "due to the pandemic" but it was mostly barriers miller/trump wanted to introduce anyway. I would expect the 2020 numbers to be much lower, and if this administration had stayed in power, continued to be much lower into 2021+.

It wasn’t “the administration.” The $1,200 stimulus is structured as a refundable tax credit. The CARES Act itself—which was enacted by a Democratic House and Republican Senate—clearly requires everyone filing a joint return to have a valid SSN. Section 2201(g) says:

> (g) IDENTIFICATION NUMBER REQUIREMENT.— ‘‘(1) IN GENERAL.—No credit shall be allowed under subsection (a) to an eligible individual who does not include on the return of tax for the taxable year— ‘‘(A) such individual’s valid identification number, ‘‘(B) in the case of a joint return, the valid identification number of such individual’s spouse, and ‘‘(C) in the case of any qualifying child taken into account under subsection (a)(2), the valid identification number of such qualifying child.

> ‘‘(2) VALID IDENTIFICATION NUMBER.— ‘‘(A) IN GENERAL.—For purposes of paragraph (1), the term ‘valid identification number’ means a social security number (as such term is defined in section 24(h)(7)).

But.. but.. the narrative..

Ah yes, the clause that neatly manages to exclude tax payers who have ITNs that look and at filing time function just like an SSN but somehow are neatly trimmed out here, I wonder how that got in there...

How did it get there?

It got there because Congress, not the administration, put it in there.

It'd be fair to say that vocal hostility toward immigration is more concentrated in one party - and that that party is spread across the WH and Congress.

To be reasonable tho, effective hostility toward immigration is historically well represented in both parties (eg: immigration policies under the previous admin).

Excluding certain immigrants from taxpayer-funded public benefits isn't "hostility." Deciding to take care of citizens and permanent residents and not others, or denying government benefits to create disincentives for illegal immigration, is a legitimate exercise of a people's right to self-determination.

This is not something limited to U.S. Republicans. Most EU countries exclude illegal immigrants from their universal healthcare systems, for example:https://rmx.news/article/article/germany-should-pay-illegal-...

Giving government benefits to illegal immigrants is a tough issue. On one hand, its rightfully an unpopular policy and risks creating incentives to immigrate illegally. On the other hand, denying benefits risks creating a permanent underclass of people who are prevented from integrating. I tend to believe the best approach is to rigorously enforce immigration restrictions, while including those who the country isn't willing to exclude or deport within the welfare system. But these should be viewed as policy choices, not in terms of "hostility" or some such silliness.

> Excluding certain immigrants from taxpayer-funded public benefits isn't "hostility."

Maybe, but the vocal hostility toward immigrants in the Republican Party is, well, vocal hostility, and not limited to a policy preference for excluding certain immigrants from taxpayer-funded benefits.

The "vocal hostility" (such as it is) rests on policy. The U.S. has twice as many illegal immigrants as "Europe" (EU-27+UK+EFTA), despite having a third less people overall. That is the result of policies--lax border enforcement, lack of enforcement of work eligibility requirements, etc.

People get hostile when other people don't follow the rules and the government doesn't enforce the rules. (E.g. Wall Street after the 2009 recession.) But that's still a matter of policy.

> Excluding certain immigrants from taxpayer-funded public benefits isn't "hostility."

That may or may not be true but it's absolutely reflective of the hostility that that colors immigration policy.

You've got it backwards. The hostility is a symptom of the policy of not enforcing immigration laws, not the other way around.

Implying that there have been any modern periods without meaningful enforcement of immigration laws perpetuates a false scenario.

Certainly, it's not the people being a bunch of hateful xenophobes, it's all those daarn foreigners, causing them to act that way.

Because ... you got there first? Except you didn't?

You seem to have missed that the point was that they denied benefits to US citizens, merely because someone else in the household did not have a SSN.

But regarding actual illegal immigrants, it's amazing how many people complain about "giving" benefits to immigrants while apparently being completely unaware (or conveniently forgetting) that a significant fraction (perhaps even a majority) of those immigrants actually pay taxes.

> You seem to have missed that the point was that they denied benefits to US citizens, merely because someone else in the household did not have a SSN.

The tax code--not just for this purpose, but pretty much all purposes--treats households filing a joint return as a single economic unit.

> But regarding actual illegal immigrants, it's amazing how many people complain about "giving" benefits to immigrants while apparently being completely unaware (or conveniently forgetting) that a significant fraction (perhaps even a majority) of those immigrants actually pay taxes.

Those taxes don't come close to paying for the benefits they use--such as cross-subsidized emergency healthcare, schooling, etc.

Yes, I will complain about illegal aliens getting benefits. Those benefits are not meant for them. They are taking resources from law-abiding citizens & residents. The cost of illegal aliens far outweighs any amount they pay in taxes [1].

> At the federal level, about one-third of outlays are matched by tax collections from illegal aliens. At the state and local level, an average of less than 5 percent of the public costs associated with illegal immigration is recouped through taxes collected from illegal aliens.

> Most illegal aliens do not pay income taxes. Among those who do, much of the revenues collected are refunded to the illegal aliens when they file tax returns. Many are also claiming tax credits resulting in payments from the U.S. Treasury.

A significant fraction of those illegal aliens actually commit fraud by using someone else's SSN. And a large amount of others pay zero tax, because they are paid under the table.

Spare me your criminal-coddling, all illegal aliens should be deported immediately.

[1] https://www.fairus.org/sites/default/files/2017-08/USCostStu...

To add to this, as I understand it if you have a SS card with the words “not valid for employment” then the IRS doesn’t consider it valid for the stimulus, even if you’ve been filing W2s for years. You have to apply for a new card so the SS database gets updated with the fact that you have a valid SSN.

At least that’s what I’m hoping, so my wife and I can finally collect that $2400 on our next tax return.

It's annoying but can't you file separately instead of jointly for your 2020 return?

If I'm interpreting the statute correctly, you'd then receive the stimulus next year. (Since anyone who didn't receive it but is qualified will receive it on their 2020 return, filed in 2021.)

Yes, but that’s going to be six-twelve months later than it should have been. And for some people, the penalty for filing separately will outweigh $1200 - such as single income households.

I can't find any mention in the article that this will obviously be corrected next year.

Because the $1,200 checks are just an advance refund on your 2020 tax return (to file in 2021).

If you get and cash a stimulus check you don't deserve, you'll need to pay it back on your return next year.

Just like if you didn't get a stimulus check you deserved because of IRS mixup (like me), you'll just get it as an additional refund on your return next year.

Considering the speed these checks got sent out, there were bound to be errors. It's not ideal, but it's not a huge problem because everything will be properly sorted out on the actual tax returns.

Some people in the article either have no ties to the US at all or have renounced US citizenship, so it _will not_ be corrected next year as they don't file tax returns.

Regardless, this is chump change to the US government, and there are other larger lost amounts of money they should probably worry about anyway.

The two people mentioned in the article still have ties to the US because they receive social security payments.

The unmentioned reality is that tying these payments to SS payouts helped millions of people - the ones who are least able to navigate complex government systems.

If you owe money to the IRS, you need to file a tax return whether you're a US citizen or not.

Now you might say, well what is the US gonna do if you don't?

Well, the people mentioned in the article receive Social Security (so "no ties to the US at all" is false), and you can 100% expect their SS checks to be garnished to cover debt to the IRS, as this happens all the time with unpaid back taxes.

So it's not going to be any free money at the end of the day.

The whole process would obviously take a few years, but literally all the systems are already in place for it. Nothing special even needs to be done. It'll just happen.

> Just like if you didn't get a stimulus check you deserved because of IRS mixup (like me), you'll just get it as an additional refund on your return next year.

Can you elaborate on this? After months of waiting and calling the IRS with nothing to show for it, I just assumed that I would never see any of that money.

If you didn't receive the check, there will be a section on your 2020 1040 tax form for "Recovery Rebate Credit" which seems to be the catch-all for anyone who missed the deadlines or didn't get their full amount for whatever reason.

I'm an American overseas who pays his taxes, has intent to return, yada yada and never received my check, and never got the online portal to recognize me, so I'm hoping this will work.

Source: https://www.irs.gov/newsroom/economic-impact-payment-informa...

Yeah, calling the IRS about this is beyond useless. Eventually they give you the way to contact someone who they claim will be able to verify your perceived eligibility in their eyes, but every time I've done that (after hours on hold) the call disconnects for some reason or their system goes down or ...

At this rate, it will be faster to file my return ASAP than to try to get my stimulus check.

> If you get and cash a stimulus check you don't deserve, you'll need to pay it back on your return next year.

Not if you're not American and overseas?

I mean, if some random country sends me free money I don't think I have any obligation to return it, and I don't think the US is particularly special.

As these payments were tied to ongoing SS payouts, I'd expect those payouts to be garnished.

It’s made clearer in the text, but the conflation of “citizen” and “resident” here is a common irritant that makes it really difficult to understand just what non-citizens are entitled to.

The issue here isn’t that they were sent to non-citizens (I am not a citizen and received a stimulus I’m fully entitled to) but that they were sent to non-citizen non-residents. I wouldn’t be surprised if this persistent mistake contributes to animosity towards immigrants.

Might as well tell my story.

The way it's gone for me is last year converted my company from S-corp to sole proprietorship. This was done because my state (NJ) was paying out unemployment claims to people I have never met (in NY) and providing me with no way to contest this other than to retain an attorney and file in superior court. The conversion had some minor tax implications but otherwise would allow me to draw instead of pay myself a salary subject to unemployment taxes. For 3 months this year I was out of operation due to COVID, during which time CARES Act was supposed to pay unemployment + $600/wk to sole proprietors. Stuck pending since April, expect to never see it. I have sent letters, faxes, spoken to court clerks, assemblymen, reported to unemployment's investigators regarding the false claims I had for a few years before COVID hit, and I was never able to get a resolution.

Regarding the IRS end, no check here. The CARES act wasn't written for people who didn't file in 2018 but were required to file in 2019. It explicitly said to not use the non-filer option if a 2019 return was required. I'm still trying to get my ID verified with the IRS (I haven't moved, they accepted 2 corporate returns last year with my name on them, and I've never hit this requirement before). I do not expect to see a check from them either. Nobody there to answer the phone for weeks now.

I did, however, receive one soft notice from the IRS notifying me that I should review and re-submit a return from (I think?) 2012 or 2013 for unreported bitcoin transactions. Yeah... I'll get right on that.

You should know that a company called Phunware, which built Trump's campaign app, received 3x as much CARES stimulus per capita than anybody was supposed to get. If you voted Republican and donated to the GOP you are way more likely to get CARES checks.

They're a horoscope company which ripped off "investors" for $40m in a scam ICO 3 years ago, and they donated heavily to Trump.

I don't understand why they're making a news story out of this $34 million dollar error without mentioning that they also sent $1.7 billion to the deceased. Neither seem newsworthy to me, but only detailing the cheapest error is strange.

Also, why is this story on the frontpage? If it wasn't an NPR story would it gain any traction here? Not only is it not newsworthy, it is uninteresting. It's more spam than news.

Eh this one doesn’t seem that strange to me. People die every day, a lot of them. Sending a check to an American that died and hasn’t been reported upwards to the federal government is not surprising. Sending money to non Americans who are not in America is a bit of a head scratcher. How did that even happen? I don’t care enough about 34 million dollars to look any further into it but I am curious about who these people are and how they got sent checks by the US government. Did they live here once upon a time and left? That would make sense to me, not dissimilar from the dead not dead people, just stale data and speed was the stated goal so stale data is to be expected.

Those noncitizens mentioned in the article all happen to receive social security payments from the US, due to having worked there in the past.

> Asked about this by NPR, the IRS acknowledged it mistakenly sent checks to some noncitizens who receive Social Security and other federal benefits — such as Wigforss, who receives a small Social Security payment from having worked in California for several years

To be specific, the checks went to legal aliens who are authorized to work in the US, but did not have wages that were withheld in 2018-2019.

Please correct my math if I got this wrong, but a less click-baity headline would be:

> IRS Says Its Own Error Sent 0.0016 Percent of a $2.2 Trillion Stimulus Package to Non-Americans Overseas

34 million / 2.2 trillion = 0.00005454...

A lot of non-Americans pay into the Social Security and Medicare systems without ever being able to collect from those contributions.

Sigh... my wife and I haven’t gotten this stimulus check yet. Every month, the IRS website has no update on our status. We filed our taxes early and even got our tax refunds before the normal April 15th deadline. They clearly have our information and our accountant confirmed that we 100% qualify. It’s very frustrating to hear this when we (and many others) haven’t received anything. Especially since that extra money could have helped relieve a lot of stress when I was job hunting because of COVID layoffs.

Meanwhile, my tax return has yet to arrive. I was pretty patient because I knew this year would be a complete shit-show for the IRS (as it has been for everyone else), but now I am starting to wonder.

Minor nit, but the return is what you file, the refund is what you're waiting for.

And they're super far behind in processing mail-in returns. Apparently they still had millions of unprocessed returns remaining as late as October, so it's likely they still haven't processed your return, but you can check the status of it here. https://www.irs.gov/refunds

Oh yeah, I have been checking that page once a week for a month now. No dice.

I hate to call and bother them, because that just means extra work for them when they're already backed up, but at the same time, I do not want to find out that my filing has been lost in the mail.

The cynical side of me says this is an expectable result of a large open system so likely a submarine story placed by Republican operatives who are trying to prevent additional stimulus spending. Or maybe the service that handles trillions of dollars is in fact completely incompetent and shouldn't be trusted with revenue routing.

Yep, a friend of mine who had been once in the States, as a seasonal worker, got the check.

This was months ago. It was a miniscule amount of the govermment budget. I can't believe people are still talking about it like it matters.

This is why we should have a simple government run narrow bank. Direct cash payments would be much less of a problem, you could implement a preferred return for savers(dual interest rates), and it would scale across multiple government programs.

How about sending it to actual Americans. I know few people who actually got checks.

This is actually ridiculous. Who pays for these mistakes? Who pays for these potential crimes?

This structure of governance is failing. In the past, we could do something to the “leaders” of our society — now the leadership is obfuscated.

I used to feel the same way (specifically around the Fed and Treasury and national debt) - until I realized, it's just a number on a screen. They print dollars as easily as you and I print from our local printer. The digits are all are meaningless - we're never going to pay back the amounts, or our national debt. We're just going to print and inflate, and pay back any old sums with numbers we just printed.

Just wait until you find out how much money is lost because an underfunded IRS believes it is unable to effectively audit the wealthy and so mostly doesn't bother.

I would suggest the opposite. IRS realizes the only revenue they're likely to extract correctly are small business owners, and middle to upper class who don't have the time nor legal fee tolerance to fight it. They already extract so little on an |absolute value| basis from the lower 70% of Americans, that it only makes sense to focus on the top x%

It's great that you have feelings about what the IRS does, but the previous commenter was talking about facts and the IRS's own statements on the issue. The IRS was in the news last year for stating that they have decreased audits on the wealthy because they take too much effort. The most-audited zip codes in the USA are extremely poor areas.

Yeah, Original statement was logic only. Followup was on how specific areas might be 'cash only' hotspots that diverge from the mean tax paid for occupations, revenue, or other criteria.

And yet they audit 25% of those receiving the EITC (https://www.foxbusiness.com/money/irs-audits-poor-taxpayers-...) who are all poor.

I hesitate to use this phrase but isn't it important to look at the "ROI" on those audits to determine if it's a good thing or not? Whether you're poor or not, you shouldn't be getting the EITC if you don't qualify for it. What does this subset of audits cost the IRS, and how much money is recovered from it? How does that compare to auditing someone who is high income but with a fairly straightforward W2, compared to someone with a lot of Schedule C and 1099 income?

To be clear I don't think the only component of the "should we audit" formula should be expected ROI; there is also a (positive) chilling effect in general where the chance of a random audit should be just high enough to dissuade folks from fraud in the first place, but the penalties not so severe that someone is bankrupted from an honest mistake.

I wonder if the IRS even thinks about a monetary ROI. Given how often poorer people are audited, I'm guessing it's all about cases closed or numbers audited and has little to do with amounts. IMO, amounts would be the better focus.

After reflection, my guess is it would be that in those neighborhoods they have identified a largely 'paid in cash, under-reported' behavior. For example, if nationally a person with "career x" makes $45k, yet reports $18k - it could be worth a look. There are large segments that do this (right or wrong) - and is one underlying benefit the govt believes of going all digital.

I can see how from their standpoint focusing on cash audits of unsophisticated businesses setups are easier than complicated, diverse, experience heavy audits.

It feels a bit like you've assumed that what the IRS is doing is optimal and then working back from that to produce a theory for why they act this way. Considering it is a bureaucracy that is vulnerable to political machinations I don't think the assumption is necessarily valid.

My assumption is not empirically correct, I agree, but neither is the belief that IRS audits of mass populations is politically motivated.

It is simply ease, right? Easier to audit where it is easy returns, or where one will get a high return (eg: high return of audit hours vs audit returns). Similar to how people often suggest police can 'issue more fines' for speeding (easy, high volume) than for difficult crimes requiring risk and time.

Right, I feel like the unspoken assumption is that we've created an environment where low-likelihood high-reward financial crimes are hard to prosecute and in that environment I find what you're saying easy to believe.

Because it's easy. It's like the IRS equivalent of writing speeding tickets to generate revenue. All they have to do is prove you made too much money. They go down a list of income types and see if you had it and how much. The man hour investment is tiny.

Interesting theory but the Treasury IG report shows the IRS doesn't even pursue hundreds of thousands of high-income individuals who do not file taxes at all. The top 1% of earners account for 70% of underreporting of income.

https://www.treasury.gov/tigta/auditreports/2020reports/2020...

Wow - that's nuts. Thanks for posting; And here I stress out to make sure the exact amount I owe is correctly reported. Oh well, better to sleep at night soundly on that issue!

Same, I spend a lot of time trying to get it right. It’s incredibly frustrating that it is so politically unpopular to fund the IRS at an appropriate level even though each dollar spent would generate more than a dollar in tax revenue.

That report is very enlightening, and makes clear that the IRS is not doing their job WRT high-income non-filers. However, I don't see from its numbers how you arrived at

> The top 1% of earners account for 70% of underreporting of income.

since it only ever addresses non-filers and doesn't mention, from what I could see, percentile brackets for the filers it does discuss.

No one should pay for it. It's within the margin of acceptability. The prime priority was to get lots of money to lots of people in the US to keep the economy going. The secondary priority was to ensure that very little money disappears into the ether. The first was met. The second was met.

It's a common principle in engineering too. Cost is monotonically increasing in failure rate, and (1-failure_rate) is asymptotic in cost, so you always make systems with failure rate > 0. The actual rate you pick is dependent on the constraints you operate under.

I used to think this was a non-engineer/engineer difference but in the past few years I've noticed it's a mindset that's actually independent of that. It's a risk modeling vs binary modeling difference. Everyone who has to make meaningful decisions does it to a large degree (engineers, architects, doctors, lawyers, assembly line workers in Andon).

I don't think I'd ever want to work with binary-modelers.

The mistake isn't permanent, the IRS can still at least attempt to collect back money sent in error. Money doesn't vanish forever just because it went into someone's bank account.

True, true, but the money involved is so little that it's likely to result in not much regained, right? After all, the IRS doesn't usually find it worthwhile to send tax delinquency information to the state dept (which is the usual mechanism to force payment from non-resident non-citizens) for these sums.

Though if I think about it, non-residents who were legitimately paying taxes are unlikely to not return the money if asked so maybe it's worth it.

Mistakes are not always crimes. Certainly not just because it happens to be a government employee making the mistake.

How exactly does an agency rushing to comply with a directive from Congress reach the level of "this structure of governance [which matches the structure in almost every other developed country in the world] is failing?"

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