Social Security: Returns Not Required, But ?

[BobKamman]

I know what IRS was worried about. They can’t go the SSA-1099 route unless they don’t have returns from 2019 and 2018. But they won’t have 2019 returns (or at least extensions) until at least July 15, right? And a few weeks after that, if they want to allow for processing time.

They haven’t told us what they are doing. But if a client really needs $1,200 or $2,400 now, and not four months from now, should we advise them to file? I have a few clients for whom I started returns just to make sure they were below the filing floor. Maybe it’s time to finish them.

And I don’t see where IRS has said it will use the bank account information that Social Security already has, to issue payments. That’s not in the law. They can use the SSA-1099 because they already have it. They don’t have the bank information. “Better Call Saul” is a TV show. It might not work with Social Security Commissioner Andrew Saul.  (The law says the bank account information already in a federal payment system "may" be used, but does not require it.)

What about the people who receive Social Security, but also file tax returns, and owe taxes? Since they don't get a refund, will IRS know where they bank? Stay tuned.

[itonewbie]

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@BobKamman wrote:

...And I don’t see where IRS has said it will use the bank account information that Social Security already has, to issue payments. That’s not in the law. They can use the SSA-1099 because they already have it..

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That's in §6428(f)(3)(B) Delivery of payments.—

Notwithstanding any other provision of law, the Secretary may certify and disburse refunds payable under this subsection electronically to any account to which the payee authorized, on or after January 1, 2018, the delivery of a refund of taxes under this title or of a Federal payment (as defined in section 3332 of title 31, United States Code).

Furthermore, the IRS' own press release says this much:

The U.S. Department of the Treasury and the Internal Revenue Service today announced that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an Economic Impact Payment. Instead, payments will be automatically deposited into their bank accounts.

“Social Security recipients who are not typically required to file a tax return do not need to take an action, and will receive their payment directly to their bank account,” said Secretary Steven T. Mnuchin.

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What about the people who receive Social Security, but also file tax returns, and owe taxes? Since they don't get a refund, will IRS know where they bank? Stay tuned.

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By a plain reading of the statute, §6428(f)(5)(B) is used only as an alternative to determine eligibility and to compute the amount payable whereas §6428(f)(3)(B) is the operative clause for the delivery of payment.  That should mean (not that they certainly will do) that even where the social security recipients file a return with balance due and provided the IRS doesn't have the direct deposit info from the taxpayer's return, they should resort to using the info from Social Security Direct Deposit if that was set up by the taxpayer.

[BobKamman]

@itonewbie  

the Secretary may certify and disburse refunds payable under this subsection electronically

May does not equal Must

Like much of what Mnuchin says, I'll believe it when I see it (and I expect it will change often anyway).

[itonewbie]

@BobKammanAnd that's also not the same as "That’s not in the law".

[BobKamman]

@itonewbie 

As I said in my original post (did you read it?)  

 (The law says the bank account information already in a federal payment system "may" be used, but does not require it.)

[itonewbie]

I did.  I just do not agree with your POV because it is in the law.  Yelling does not help your cause.

And when Secretary Mnuchin and the IRS make public statements that certain actions will be carried out, there is no reason to doubt their commitment.  If it were to ultimately end in failure or if they do not deliver, they would then be held accountable.  Until then, this is merely a matter of opinion and trust.