TIGTA: Taxpayers Can Pay With Cash, But Few Do

Chris Gaetano
Published Date:
Feb 13, 2020

The Treasury Inspector General for Tax Administration (TIGTA) has issued a report saying that the IRS program allowing people to pay their taxes in cash is user-friendly and efficient, but that hardly anyone ever uses it. 

Since 2016, taxpayers have been able to make a cash payment on their taxes at more than 9,200 retail stores in 44 states. There is no cost to the IRS to provide this option, but taxpayers are charged a fee of $3.99 per payment. The option was developed as a way to help the millions of people in the United States who lack a checking or savings account. TIGTA said that the program itself works very well: After simulating the taxpayer experience by making 19 payments at 18 locations, inspectors found the process to be very easy. 

However, it seems, the program is simply not catching on with taxpayers: Over the past four years, fewer than 700 people have ever taken advantage of it. TIGTA identified three possible reasons for this. First, the payment process requires taxpayers to scan a barcode at a participating retail store within seven calendar days of issuance. If not scanned within these seven days, the barcode expires, and a new barcode needs to be issued for a payment to be made. In calendar year 2018, more than 80 percent of the barcodes that the IRS issued expired. Second, the IRS does not routinely advertise or promote this payment option. Therefore, many taxpayers are likely unaware that this option exists. Finally, while the external partnership increased the number of locations where taxpayers can pay with cash, geographic coverage could be improved. For example, Mississippi has the highest percentage of unbanked households, but it has no participating retailer that accepts cash for tax payments

TIGTA recommended  extending or eliminating the barcode expiration time frame, partnering with more retailers in underserved areas, and conducting more public outreach to help people be aware of the cash options. The IRS disagreed with the barcode recommendation, believing that it isn't that big a problem, but agreed with the other two. 

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