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The Treasury Department is developing a plan to “retrieve” $1,200 economic impact payments that were accidentally sent to dead people, according to a report in Politico. Meanwhile, tens of millions of people who are very much alive are still waiting for their payments as we inch closer to the end of the month.
There have been dozens if not hundreds of reports of people receiving money meant for their deceased relatives. One deceased woman in Connecticut’s check was even labeled “DECD” for deceased, her daughter told NBC Connecticut on Tuesday.
On Tuesday, Treasury secretary Steven Mnuchin, said that heirs are “not supposed to keep that payment.” It’s so far unclear how Treasury plans to recoup the money. When small business loans that were granted to large corporations, the Trump administration opted for publicly shaming the businesses that took the money (like the Los Angeles Lakers and Potbelly sandwich chain), over forcibly seizing recouping it.
The economic impact payments were included in the stimulus package passed by Congress last month, with guidance to the IRS to base the payments on 2018 and 2019 tax returns. As the payments began to filter out over the next few weeks, the IRS appears to have received no instruction to check if the recipients are still alive.
“The IRS is following the law,” former Taxpayer Advocate Service head Nina Olson told the Los Angeles Times last week. “The law tells the IRS to look at what the taxpayer reported on their 2019 return. ‘Look at their income and their filing status. If they are eligible based on that, make the payment.’ It doesn’t say, ‘Don’t make the payment to dead people.’” It’s unclear exactly how many deceased people were sent checks.
“We’ll get that back,” Trump said of the payments at a coronavirus task force press briefing on April 17. “Everything we’re going to get back. But it’s a tiny amount. [The IRS has] done a fantastic job. This was done in a matter of a few days.”
It isn’t the first time something like this has happened. As part of the American Recovery and Reinvestment Act in 2009, the Obama administration made $250 payments to 52 million Social Security beneficiaries and accidentally sent nearly 72,000 payments to people who had already died, according to a 2010 inspector general report.
The misspent funds totaled around $18 million, a drop in the federal bucket, and the federal government never made a concerted effort to recover that money. But that same report recommended that after future economic stimulus payments, Treasury and the Social Security Administration work together to “reclaim [economic recovery payments] issued to deceased beneficiaries.
While the federal government attempts to figure out a way to claw that money back, however, many living people are still waiting on their payments. Roughly 150 million people are eligible for economic impact payments; as of last Friday, 88.1 million payments had been issued, according to the federal government.
There’s a number of reasons why people might not have gotten their payments yet, ranging from the simple — the IRS doesn’t have your bank account information on hand, which is the fastest way to receive your money — to the highly questionable, such as a partner or relative’s immigration status. Checks can take up to two weeks to arrive, and the IRS and Treasury said that non-tax filing recipients of Social Security payments, supplemental security income (SSI), and veterans’ benefits should start receiving their payments at the end of this month and in early May, according to the Washington Post.
With any luck, those waiting on payments won’t run into a similar problem as one Kentucky man whose unemployment application was held up — and then publicly pointed to by Gov. Andy Beshear as an example of a prank — because his legal name happened to be Tupac Shakur. Beshear apologized to Shakur on Tuesday.
“I understand, he’s dealing with a lot,” Shakur told the Lexington Herald-Leader. “Mistakes happen.”
Cover: President Donald Trump listens during a meeting with Gov. Ron DeSantis, R-Fla., on the coronavirus response, in the Oval Office of the White House, Tuesday, April 28, 2020, in Washington. (AP Photo/Evan Vucci)