The Internal Revenue Service (IRS) seal hangs onstage at an IRS Criminal Investigation 100th anniversary event held at the agency’s headquarters in Washington, DC, USA on Monday, July 1, 2019. Photographer: Andrew Harrer / Bloomberg via Getty Pictures
An unlikely group is among the recipients of the coronavirus stimulus controls: the dead.
The IRS began distributing $ 290 billion in direct cash payments last week as part of the $ 2 trillion CARES Act incentive account. As part of the plan, the IRS has been sending checks of up to $ 1,200 per person and $ 2,400 per couple in recent days to weather the economic crisis resulting from the coronavirus pandemic.
However, the agency sent a number of one-time payments to deceased persons’ bank accounts, USA Today reported this week.
It is not immediately clear how many deceased people received the direct deposits.
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Rep. Thomas Massie, a Republican from Kentucky, said on Wednesday that a friend texted him saying that his father, who died since 2018, had just received his $ 1,200 in promotional money, according to MarketWatch.
“We are aware of all questions related to survivors and we are still working on that problem,” said IRS spokesperson Eric Smith. The Treasury Department did not immediately respond to a request for comment.
This is not the first time the federal government has issued promotional checks to the dead.
More than 71,500 dead Social Security recipients received $ 250 incentive payments under the American Recovery and Reinvestment Act, according to a 2010 report from the Inspector General of the Social Security Administration. Deceased social security recipients received $ 18 million of the $ 13 billion reserved for all social security recipients in that Obama-era stimulus package.
The IRS made this latest snafu possible because of the administrative resources it has and the speed with which the service has attempted to make the one-off payments, tax experts said.
“It could happen because the date of death data is incomplete or because the IRS in a rush to get money didn’t have time to reconcile the date of death data with the tax return,” said Janet. Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center.
The IRS relies largely on the SSA for current death records, experts said. But according to Leonard Burman, co-founder of the Urban-Brookings Tax Policy Center, it can take a few months to a year or more for that information to trickle in.
The IRS would also likely have relatively timely death records on file for a final annual tax return, the law requires surviving relatives and asset managers to file on behalf of a deceased person. It would appear from the tax return that the taxpayer has died.
However, if an individual died in 2019 and their most recent tax return was in 2018, it is conceivable, according to Holtzblatt, that the deceased could have received a stimulus payment of $ 1,200.
That’s because the IRS based the size and receipt of stimulus payments on a taxpayer’s 2018 or 2019 tax return, whichever was last filed.
An open question is whether the surviving spouses, family members, and others of a deceased person should repay the money to the IRS. The IRS and Treasury Department have not yet provided a clear answer, experts said.
‘Is that okay? Can they keep it? That’s the big question, ”said Holtzblatt.
Here’s another unanswered ripple, according to Holtzblatt: If the IRS accidentally tries to send a stimulus payment to a deceased person and the money returns because the bank account on file is closed or the mailing address is invalid, the IRS will keep that money or is a surviving family member entitled to the money?
There is an indication from the CARES law that could indicate that they can keep the payments, experts said. Americans who have received a bigger stimulus payment than they should be able to keep the extra funds, according to the law.
This may apply to someone who received an increase in 2019, for example, but whose incentive payment was based on the 2018 lower-income tax return. Those who earn over $ 99,000 are not eligible to receive the payments.
This is a developing story. Check back regularly for updates.