On Monday, September 26, 2022, the Bipartisan Policy Center (BPC) released a report which evaluated the administration and take-up of the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) and proposed policy recommendations. To celebrate and promote this release, BPC partnered with the National Academy of Public Administration’s (the Academy) Center for Intergovernmental Partnerships (the Center) to host an event to promote the report and discuss solutions.  

The Center and BPC recruited five individuals to provide context for why the background and recommendations contained within the report are vital for the continued bipartisan success these tax credits represent. The event featured:

• John Koskinen (Keynote), Former Commissioner, Internal Revenue Service, US Treasury 
• Isabel Dickson, Economic Mobility Specialist, Colorado Department of Public Health and Environment  
• Gabriela Lastres, Senior Policy Advisor, Office of County Judge Lina Hidalgo, Harris County, Texas 
• Andy Phillips, Director of the Tax Institute, H&R Block 
• Rebecca Thompson, Vice President of Strategic Partnerships and Network Building, Prosperity Now 
• Additionally, Rachel Snyderman, BPC’s Senior Associate Director of Economic Policy, presented the paper’s recommendations and served as Moderator, while Terry Gerton, the Academy’s President & CEO, provided a welcome and introduction of John Koskinen.

After Rachel introduced key research findings of the BPC report, Commissioner Koskinen used his keynote to express his support of the BPC’s paper and provide a backdrop for the importance of work around the CTC and EITC. As a former IRS Commissioner, he is familiar with many of the challenges BPC’s report addressed, as he managed them during his time in office. For instance, despite each program’s over 80% uptake, millions of eligible Americans do not claim these tax credits for several reasons. However, he emphasized that a balance must be struck between increasing uptake while simultaneously managing the level of improper payments. One crucial step to maintaining this balance is building trust in communities where uptake is already low. This trust enables states, localities, and their partners to guide individuals through confusing scenarios and shift communities away from less legitimate tax preparers and resources.

Gabriella Lastres echoed this point, noting that it is all too easy for underserved communities, immigrant populations, and individuals who do not have a strong grasp of English to turn to family or community members they trust for tax guidance. In some cases, this trust can lead to improper filing or payments, ultimately causing more challenges for both the IRS and the taxpayer. She noted that better outreach into these communities makes a difference. For instance, her county, Harris County, TX, recruited the largest VITA provider to consistently meet these improper or non-filing populations in their communities to make them aware of the credits available to them and assist with filing. Harris County helped to facilitate the availability of tax filing resources consistently at community schools, places of worship, and other gatherings. Their targeted efforts saw approximately $500,000 of ARPA funding turn into around $13.0M returned to Harris County.

While putting this one-time funding to good use is vital, Rebecca Thompson expressed that multi-year funding is the true solution for many of these challenges that the IRS and taxpayers experience. She suggested the IRS use the $80B of funding over the next ten years to hire and train additional employees to provide sufficient technical support, build out the digital processing components on the back and front end, and improve the legacy systems that slow down paper filing. A shift to E-filings whenever possible is also important, as they are upwards of 98% accurate compared to paper at 60%. Expanded support and increased effectiveness for the technology will see errors from filers, and some improper payments from the IRS, decrease.

Decreasing improper payments should be another priority for the IRS, as they impact all aspects of our tax system, not just the CTC and EITC. They are a thorn in the side of both filers and the IRS. Andy Phillips stated that part of the problem is the difficulty in determining whether a preparer is legitimate. States vary significantly in the number of resources they dedicate to monitoring tax preparers, a concerning inconsistency in the interconnected digital world we now inhabit. Lack of consistent registration, testing, and continuing education standards for preparers can lead to incorrect information for taxpayers, errors in filings, and payments going out in the wrong amount or to the wrong individual.

Concern over misfiling or receiving improper payments can also lead to apprehension or fear of submitting on the filer’s part. Isabel Dickson indicated that there are many ways to combat misinformation or fear around filing, centered around meeting people where they are regarding both language and priorities. Colorado found that they could increase uptake of CTC and EITC by advertising these programs alongside other benefits programs the state runs out of different departments. Additionally, she reiterated Gabriela’s statements about the use of VITA centers. Investing in those community/non-governmental partners and increasing accessibility to reliable, language-appropriate resources helps improve comfort and understanding in communities with higher numbers of non-filers.

Of course, these are only small steps on the long road to achieving the recommendations captured in BPC’s report. Improving the administration and uptake of these tax credits and overall IRS processes will take the continued efforts of many passionate individuals similar to this event’s participants. To support these endeavors, BPC and the Center will continue promoting the best practices and solutions that will facilitate the modernization of the IRS, better outcomes for filers, and improved information and trust for those who fear engaging with the system.

BPC and the Center would like to thank the participants for their insightful conversation and continued efforts to improve the uptake and administration of the CTC and EITC. Stay tuned for more BPC and the Center programming related to these topics.

Access a record of this event through BPC’s Youtube or C-SPAN.