The Role of the IRS as a Social Benefit Administrator

The IRS primarily serves as our nation’s tax collector, but it is also one of our nation’s largest conduits for delivering social benefits, most prominently the earned income tax credit (EITC). The EITC is a hybrid of tax and social policy; it is neither just a refund of all taxes paid nor welfare as we used to know it. Housing the EITC at the IRS is problematic, yet no other alternative is better situated and equipped to play the role.

With no obvious alternatives and a value in having the IRS play the role, the focus needs to be on how to make the IRS a better administrator of social benefits, including the EITC. Sensible changes can make the IRS a viable, trusted, and effective administrator of programs delivering important benefits to low-income Americans.

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