- How did the #IRS fail to use modern payment technology that benefits taxpayers? @AlexBrill_DC
- Low participation in #IRS debit card program suggests failure of government in setting up pilot
- Details bounce #IRS debit card program aimed to help lower/mid income families
The IRS issued 119 million tax refunds worth $358 billion to individual tax filers last year; of those, 45 million refunds, totaling $166 billion, were issued by check. Moving that magnitude of money to that many households is no easy task. To lower the administrative cost for the government and the taxpayer, the Treasury Departmenta pilot program last year that distributed tax refunds to low- and middle-income taxpayers through prepaid debit cards hailed as convenient, safe, and cost-efficient.
Many expected the program to be a big hit, especially because it followed other government programs’ success in phasing out payments by check in favor of direct deposits or debit cards.
But Treasury’s initial enthusiasm about the pilot program did not translate into participation—of the 600,000 taxpayers given the option of receiving their tax refund on a prepaid card, only 2,000 chose to do so. Now, Treasury hasthe program.
Alex Brill is a research fellow at AEI