WASHINGTON – If your dead relative got a coronavirus stimulus check, the government wants the money back.
The Treasury Department said Wednesday that people who received a stimulus payment on behalf someone who is deceased should return the money immediately.
“A payment made to someone who died before receipt of the payment should be returned to the IRS,” Treasury said in a statement.
The entire payment should be returned unless the money went to a couple who filed jointly and one of the spouses was alive when the money was received, the department said. In that case, the living spouse must return only the portion of the payment made on the account of the deceased.
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Reports of dead people getting stimulus payments started to surface last month when the Internal Revenue Service began making direct deposits of up to $1,200 into taxpayers’ bank accounts. The payments were authorized under a new $2.2 trillion recovery package designed to help the economy recover from the catastrophic effects of the coronavirus pandemic.
The IRS did not say if there are any legal consequences for failing to return the money.
Nina Olson, the founder of the Center for Taxpayer Rights and a former taxpayer advocate for the IRS, questioned whether the Treasury Department had the power to compel people to return the payments, which are technically a tax credit.
Olson cited text of the CARES Act, which says when people file in 2020 the amount of the credit cannot be adjusted "below zero," to argue the IRS would face an uphill battle trying to force people to pay it back.
"It may be the IRS made a mistake by making the payment to a deceased person. It can certainly ask folks to give the money back. I don’t see the legal authority for adjusting it on the 2020 return," she told USA TODAY.
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The stimulus payments were issued based on 2019 tax returns, but because the tax deadline was pushed back from April 15 in response to the coronavirus outbreak, many Americans had not filed yet. In those cases, the IRS used 2018 tax returns to determine eligibility for stimulus payments. The result? Some people who died after their 2018 or 2019 returns were filed got a stimulus check.
Neither Treasury nor the IRS indicated how many checks went to dead people.
So how should the money be returned?
If your dead relative received a paper check, write “Void” in the endorsement section on the back of the check and then mail it back to the IRS. Include a note stating the reason for returning the check. Don’t staple or bend the check, and don’t attach a paper clip to it.
If you’ve already cashed the paper check or if the money came via direct deposit, immediately send a personal check or money order to the IRS. The personal check or money order should be made payable to “U.S. Treasury.” Write 2020EIP on the check or money order and include the taxpayer identification number (Social Security number or individual taxpayer identification number) of the recipient of the check. Also include a brief explanation for why you’re returning the money.
The address where the money should be returned depends on the state you live in. Those addresses can be found on the IRS website.
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Contributing: William Cummings.
Michael Collins covers the White House. Reach him on Twitter @mcollinsNEWS.