$1.4billion stimulus payments were sent to dead people – watchdog finds

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The US Treasury Department and IRS sent about 1.1 million coronavirus stimulus payments, totaling almost $1.4 billion to dead people as of April 30, a Government Accountability Office (GAO) paper released Thursday reported.

The mistake come as the U.S. government hurriedly issued stimulus payments to millions of Americans in the wave of the coronavirus pandemic.

The stimulus checks were authorized by Congress with the $2 trillion CARES Act, about $300 billion of which went to the payment program. About 160 million payments totaling $269 billion have been sent, according to the GAO report.

The payments are based on either 2018 or 2019 tax returns, so some individuals who filed taxes still received payments, even though they had since died.

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The new report which revealed payments to dead persons has generated controversies.

For the most part, the IRS doesn’t require people to pay back extra money they may have received. “There is no provision in the law requiring repayment of a payment,” the agency states on its website.

But payments to the deceased are an exception, as are checks that went out to people who are incarcerated, CNBC reported.

Treasury Secretary Steve Mnuchin made it clear that money to the deceased should be returned. The IRS has said the same.

“A payment made to someone who died before receipt of the payment should be returned to the IRS by following the instructions about repayments,” according to the agency.

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One partial exception is if a married couple filed their taxes jointly, but then one spouse passes away. In that circumstance, the surviving spouse can keep their own payment. But they must return the portion of the money paid to the decedent, according to the IRS.

The GAO report calls for further action from the IRS. It points out that the agency does not currently have a plan on how to reach out to people who need to return the money to instruct them to give it back.

“Treasury and IRS did not use the death records to stop payments to deceased individuals for the first three batches of payments because of the legal interpretation under which IRS was operating,” GAO said. The watchdog was provided the figure about the number and dollar amount of payments sent to dead people by the Treasury Inspector General for Tax Administration.

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The payments sent to deceased individuals are small when compared to the overall number of payments made. Treasury and the IRS have distributed about 160 million payments totaling nearly $270 billion as of May 31, according to the GAO report.

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