IRS prepares coronavirus plan B for 2019 non-filers

The agency has been tasked with sending out relief checks to American households in the middle of tax season

The IRS has been tasked with sending out direct cash payments to many American households that have been hit by measures taken by governments to stem the spread of coronavirus throughout the U.S.

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The payments, to the tune of $1,200, will be based on individuals' tax returns – and filers above a certain threshold, which is expected to be set around $75,000, would see the benefit decline. It would phase out entirely at $99,000.

So how will the IRS determine whether you are eligible for the benefit? It will look at your tax returns.

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But what happens if you haven't filed for the current year yet? The Trump administration recently announced that taxpayers have until July 15, not April 15, to file their returns for 2019.

According to language in the stimulus bill working through the Senate, the agency will look at your tax year 2018 return (which would have been filed last year).

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There are other challenges, however, the agency may face with just a few short weeks to turn around the checks.

The IRS has been dealing with a shortage of both cash and staffing – both of which have been on the decline throughout recent years.

The agency's budget fell by about $2.6 billion between fiscal 2011 through 2019. Its 2019 budget was smaller than its fiscal 2000 budget when inflation is factored in, the Government Accountability Office (GAO) wrote in a report. At the same time, staffing has been reduced by nearly 30,000 positions over the same time period.

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The IRS will also be conducting its regular tax season duties while fulfilling the federal government's new mandate of doling out the direct cash payments. While the tax deadline has been extended until July 15, people who are owed a refund have been encouraged to file by the normal April deadline so they have their checks earlier.

Some believe these factors could delay when the checks are supposed to be received.