IRS sends $1,200 stimulus checks to deceased people

Many Americans are eagerly awaiting stimulus checks of up to $1,200 starting this week, but in a few cases recipients won’t celebrate — because they’re dead.

The IRS began handing out $290 billion in direct cash payments over the past week as part of a $2 trillion CARES Act stimulus bill, and anecdotes are already surfacing about the issuance of money by the IRS to the deceased.

Rep. Thomas Massie, a Republican from Kentucky, said Wednesday a friend texted him to say his father, who has died since 2018, had just received his $1,200 in stimulus money.

“Ok that’s crazy but that’s just the tip of the iceberg. This is a direct text to me from a friend. I called to confirm this just happened,” Massie wrote on Twitter TWTR,
The lawmaker became the target of bipartisan scorn late last month when he unsuccessfully sought a roll call vote on the stimulus bill. He noted that his friend had filed the father’s taxes for 2018.

In Florida, tax preparer Adam Markowitz also saw examples among his IRS clientele sending stimulus money to deceased people this week. (He declined to go into further detail to protect his clients’ privacy.)

Plus, it looks like survivors can keep the money, Markowitz and other tax experts told MarketWatch.

“There is nothing in the IRS that prevents a deceased person from receiving this money.”

— Adam Markowitz, Vice President of Howard L Markowitz PA, CPA

“There’s nothing in the IRS that prevents a deceased person from receiving that money,” said Markowitz, enrolled agent and vice president of Howard L Markowitz PA, CPA, based in Leesburg, Florida.

It is important to remember some of the stimulus check guidelines to understand how such a turn of events can occur.

When the IRS determines eligibility and check amounts, it looks at the adjusted gross income on a household’s 2019 tax return. (These are returns filed during the current tax season, which ends July 15.)

If the IRS doesn’t have the 2019 return yet, it looks at the adjusted gross income on the 2018 tax return to determine the size of a household’s stimulus check.

Single filers with an adjusted gross income of less than $75,000 will receive a $1,200 payment and married couples earning less than $150,000 will receive a check for $2,400. The government will also pay $500 per eligible child under 17.

“The IRS claims it’s going to take data from your last available tax return,” Markowitz said. “If a taxpayer filed jointly with a deceased spouse in 2018 and has not yet filed a 2019 tax return, the IRS likely has no safeguards in place to ensure that they will not this payment to someone who is no longer with us.”

This isn’t the first time the federal government has issued stimulus checks to the dead. According to a 2010 report by the Inspector General of the Social Security Administration, more than 71,500 deceased Social Security beneficiaries received $250 stimulus payments under the US Recovery and Reinvestment Act. Deceased Social Security recipients received $18 million of the $13 billion set aside for all Social Security recipients under this Obama-era stimulus package, says the report.

About half of those checks were returned, the Inspector General’s report estimated, when examining a sample of 50 payees.

“People may have returned it, but they didn’t need it,” said Nina Olson, the former head of the Taxpayer Advocate Service, an internal IRS watchdog. The same goes for the $1,200 stimulus payments, according to Olson. The CARES Act stimulus bill had no ‘clawback’ provision for stimulus checks sent to a deceased person, which means the agency cannot recover the money after it has been distributed. , she said. “Congress hasn’t written around it this year,” she said.

According to Nicole Kaeding, an economist and vice president of policy advocacy at the National Taxpayers Union Foundation, a right-wing tax think tank, the primary goal of the stimulus bill was to provide quick cash to consumers and to businesses, not total precision.

A key part of the stimulus bill is “that if the IRS sends you too much money, you don’t have to pay it back.”

— Nicole Kaeding, Economist and Vice President of Policy Advocacy at the National Taxpayers Union Foundation

“An important provision of the [Coronavirus Aid, Relief, and Economic Security] act, when it comes to these checks, is if the IRS sends you too much money, you don’t have to pay it back,” Kaeding said. “It’s considered a clerical or math error on the part of the IRS. And that’s significant because they were trying to get these checks out quickly.

The IRS knows that “some people will get money even though they don’t qualify, but expedited processing was their primary concern.”

The IRS and Treasury Department did not immediately respond to requests for comment.

The real open question is “the opposite situation, where someone doesn’t have enough,” Kaeding noted. This can happen, for example, if a woman had a child after filing a 2018 tax return, but hasn’t yet filed a 2019 tax return, and potentially missed $500 for the newborn.

“The IRS wouldn’t include the child in their check, but the child would qualify,” she said. Tax experts await guidance from the Treasury Department on what will happen in this type of scenario, Kaeding said.

Massie, in a statement to MarketWatch, said the CARES Act’s speed comes at a cost.

“The government is in such a rush to get the small business loans and the $1,200 checks that many mistakes will be made and fraud will be rampant,” he told MarketWatch. “The government is skipping the usual and necessary due diligence that is usually done when transferring taxpayers’ money. Will these programs be sufficiently audited in a year or two? I doubt.”

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