When the IRS sent the first round of stimulus checks to Americans to help ease the economic crisis, the urgency of the situation caused the agency to make some mistakes. Sending checks to deceased people was one of them. What must you do if you received one?
The IRS mistakenly sent $ 1.6 billion in economic stimulus checks to people who have already passed away, and the confusion regarding what should be done with them began just after the IRS began the distribution process in mid-April.
Initially, the IRS said that Americans who received these payments by mistake should return them, but later on, the agency reported that it had canceled the uncollected payments that it had sent in error. Therefore, those who received a check from a relative who died - and did not cash it - do not have to return it.
A report from the Government Accountability Office last August said that “the Treasury is considering sending letters to request the return of the remaining outstanding payments but has not yet begun to do so because, according to the Treasury, “Congress is considering legislation that could clarify or change the requirements of eligibility".
If you received one of these checks, here is what you should do, even if you do not receive a notice from the IRS asking you to do so.
If the payment was a paper check and it hasn’t been cashed:
• The IRS has said you do not need to do anything, for the agency has canceled uncollected payments.
If the payment was a paper check and you have cashed it, or if the payment was a direct deposit:
• Submit a personal check, money order, etc., immediately to the appropriate IRS location for your state.
• Write on the check/money order made payable to “U.S. Treasury” and write “2020EIP,” and the taxpayer identification number (Social Security number, or individual taxpayer identification number) of the recipient of the check.
• Include a brief explanation of the reason for returning the EIP.
More than 70% of the money has already been recovered and the IRS is still evaluating what steps to take to recover the rest, but it’s probably a good choice to act before it becomes mandatory in order to prevent fines or other legal problems.