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IRS stimulus checks are still delayed for many and an unknown glitch may be to blame

The third Economic Impact Payment has been ensnarled by unidentified issues for untold numbers of Americans. The IRS denies it has a systemic problem.

IRS stimulus checks are still delayed for many and an unknown glitch may be to blame
[Photo: iStock]

Like millions of frontline workers around the country, Susan Pritchett was thrilled to learn that there would be a third stimulus check. Her hours were cut at the Illinois hospital where she works, and she was worried about how to provide for her family for the better part of last year.

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“There are not enough words in the dictionary to describe how helpful this payment would be for my family,” Pritchett told Fast Company. “We are already behind and it will only get worse.”

But even though she was eligible to receive the check, her payment never showed up. As the first round of checks began appearing by direct deposit in people’s bank accounts in March, Pritchett waited and waited but nothing arrived in hers. Subsequent rounds of checks were delivered in April. Still nothing. Calls to the Internal Revenue Service proved fruitless, an endless labyrinth of hold music, unhelpful phone representatives, and accidental disconnections. In May, Pritchett finally contacted some of her local and state representatives, including Senator Tammy Duckworth, whose office conducted an inquiry on her behalf.

That led to a personal phone call from the IRS, and that’s when Pritchett says she was told by an IRS representative that it couldn’t release the funds because of a “programming error,” which the representative on the phone couldn’t resolve. Pritchett was gobsmacked.

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“I absolutely cannot believe that after everything we have been through in the last year, it is made worse due to a ‘programming error’ by one of the largest federal agencies in this country,” she says.

Pritchett is one of an untold number of American taxpayers whose third Economic Impact Payment has been ensnarled for months by unidentified issues. In correspondence to taxpayers seen by Fast Company, the IRS has used vague but consistent language to describe the reason for these payment delays, often blaming a “systemic issue,” “programming issue,” or “technical issue,” all of which sound a lot like synonyms for “glitch.”

Scott Busansky, a taxpayer in southeastern Pennsylvania, is facing a similar situation. After nearly every eligible person he knew received a third stimulus check by April, he contacted his congressman, Dan Meuser, whose office conducted an inquiry. In a mailed response, the IRS said Busansky’s payment had been postponed due to a technical issue, but it offered no further details or a timeline for when the issue might be resolved.

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“This was [supposed] to be a lifeline to help with the recovery from the pandemic,” Busansky says.

Busansky is part of a Facebook group where hundreds of people claim to be in the same boat—approved to receive the third stimulus payment but facing indefinite delays with no clear timeline for resolution. Many are desperate, living paycheck to paycheck, in financial dire straits, or falling behind on bills. They’ve spent countless hours trying to reach the IRS by phone, only to encounter staffers whom they describe as rude or simply clueless. They are increasingly frustrated that a federal stimulus program meant to look out for their interests could so easily be thwarted by what appear to be simple glitches. Even more vexing, they say, is that the IRS won’t publicly acknowledge the issue.

“We need that stimulus everyone else has received,” says Kathy Crowell, a member of the group. “For some reason [we] got stuck in this glitch.”

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An IRS spokesperson told Fast Company that the agency is not aware of any widespread technical issues with the stimulus check rollout, and that correspondence from the IRS describing such issues as systemic or technical are the result of poor communication. “No systemic issues are preventing eligible individuals from receiving a third economic impact payment and we apologize if any of our assistors mischaracterized the situation,” the agency said in a statement.

It went on to say that, in some cases, the IRS may delay a payment due to a “condition” that has to be resolved on a taxpayer’s account. One common example is an amended tax return, which would then need to be further processed to determine eligibility. The IRS said there are “several” such conditions that might cause a payment delay until it is addressed, but it did not provide any other examples. The taxpayers we spoke with for this story said they did not file amended returns.

Too many moving parts

Officially, the IRS has delivered more than 169 million payments to Americans since the American Rescue Plan Act was passed in March, totaling more than $395 billion. That figure represents the majority of the approximately $410 billion that was allocated for direct payments.

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Still, it’s not like the agency’s technical inefficiencies are a secret. In its annual report to Congress, the National Taxpayer Advocate, an independent office within the IRS, recently underscored the urgent need for technology upgrades as a way to expedite payments and improve communication with taxpayers. It has also urged legislators to provide the IRS with funding to expand digital services as part of a much-needed modernization plan. To make matters more complicated, the IRS is facing staff shortages while it tries to implement on-the-fly changes to tax law, such as the recent expansion of the child tax credit that will result in monthly checks to parents.

Unfortunately, that won’t help taxpayers who were relying on a $1,400 stimulus check that they never received. Some members in the Facebook group have theorized that their situation is not common enough to rise to a level the IRS would deem necessary for action. Given the massive scale of the stimulus program, even an uncommon glitch could allow hundreds or thousands of people to slip through the cracks.

The IRS has recommended that eligible Americans who don’t receive their third checks claim it as a recovery rebate credit on their 2021 taxes, but that would mean waiting until next year. For taxpayers like Pritchett who are just trying to stay afloat, that might as well be an eternity. “I can assure you that if I owed the IRS money they would have no problem taking it out of my correct bank account they have on file,” she says. “But for some reason cannot deposit money into it.”

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About the author

Christopher Zara is a senior staff news editor for Fast Company and obsessed with media, technology, business, culture, and theater. Before coming to FastCo News, he was a deputy editor at International Business Times, a theater critic for Newsweek, and managing editor of Show Business magazine

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