IRS is sending stimulus checks to dead people
MIAMI — When Judy Eitneier received a $1,200 check from the Internal Revenue Service last month made out to her mother, she was puzzled.
“What? Why?” Eitneier said, describing her reaction. “Mother is dead.”
In its haste to revive the economy during the coronavirus pandemic, the IRS has been sending $1,200 stimulus checks to dead people.
The federal tax-collecting agency won’t divulge how many Economic Impact Payments have been mailed in error, nor the amount of money disbursed to the deceased. The IRS has also mailed an untold number of the checks to people who are incarcerated and ineligible for the relief funds.
The tax agency knew some of the intended recipients are dead. Their checks include the notation DECD, for deceased, right next to the last name, but were sent anyway.
It’s not clear what heirs should do with the payments. The IRS initially said they could keep them, but later said they should give the money back.
Linda Dasher, 80, a retired bank employee who lives in Coral Gables, received $2,400 for herself and her late husband, who died at age 76 in April 2018.
“I was shocked when the check came,” Dasher said, laughing. “It’s a nice little surprise but I don’t think I’ll go out and get a boob job.
“Who would have thought I’d be alive to see something as weird as coronavirus?”
The $2.2 trillion CARES Act passed by Congress empowers the IRS to send payments to eligible 2019 or 2018 tax filers of up to $1,200 per adult for individuals whose income was less than $99,000 (or $198,000 for joint filers) and $500 per child under 17 years old — or up to $3,400 for a family of four.
“When Congress stood this program up, they had a choice — do it slow and more accurately or fast and less accurately. I think they made the right choice because we were and still are in an absolute emergency where people are not making any income,” said Ryan Ellis, an IRS enrolled agent who runs a tax practice in Washington, D.C.
“It’s a messy and sloppy, fast and dirty way to get money out the door. Leakages are inevitable when you’re talking about 150 million returns filed per year. The IRS has a notoriously outdated computer system and undoubtedly knew this would happen but decided to deal with it later.”
Aida Shafer, a Miami CPA at Viciana and Shafer, has heard from three clients who received checks for relatives who died.
“The government definitely dropped the ball,” Shafer said. “Nobody was thinking, ‘Wait, they’re not here anymore and we’re still sending a check.’ The IRS had time to figure out if your adjusted gross income was too high. How could they not have time to figure out if the taxpayer was deceased? It’s nutty. This could turn out to be a huge population receiving erroneous checks.”
Asked why the government sent checks to people it knew had died, the IRS didn’t explain but responded by reiterating the latest FAQ advisory on its website that “a payment made to someone who died before receipt of the payment should be returned to the IRS by following the instructions about repayments.” Either write VOID on uncashed checks and return them, or, if they’ve been cashed or deposited, write a new check or money order to the IRS.