The US Government Accountability Office (GAO) has issued a report with the explosive news that almost 1.1 million stimulus payments totaling nearly $1.4 billion were sent to dead people. Don Moore’s deceased wife of 42 years was one of the million.
Moore’s wife, Elaine, died last year at 66. But the IRS sent him a letter dated May 13 saying the couple would be getting $2,400 in stimulus money, which would be direct-deposited into their bank account. The letter clearly assumed Elaine Moore was alive and, hence, eligible for stimulus funds.
“We hope this payment provides meaningful support for you at this time,” said the letter signed by President Donald Trump.
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The Coronavirus Aid, Relief, and Economic Security (Cares) Act, signed into law March 27, provides up to a $1,200 economic impact payment for individuals and up to $2,400 for taxpayers filing a joint return. But the distribution has been beset by glitches - including checks sent to dead people.
The optics of sending stimulus payments to dead people didn’t look good for the administration. So, in an offhanded comment on April 17, Trump said the payments should be returned. “Sometimes you send a check to somebody wrong,” Trump said in a coronavirus task force press briefing. “Sometimes people are listed, they die, and they get a check. That can happen. … We’ll get that back.”
But nobody from the IRS communicated this directly to Moore.
(The Florida widower hasn’t received a stimulus payment anyway, not for himself, nor his wife — but that’s because of a whole other series of unrelated IRS glitches, too numerous to recount here).
For many surviving spouses, adult children, and estate administrators, the confusing signals have created anxiety over what to do with the payments --- and the prospect that the IRS could go after people who have already spent the stimulus money.
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Moore learned his wife wasn’t entitled to the payment only after he made half a dozen calls to the number listed in the letter bearing Trump’s signature, a document the IRS is required to send under the Cares Act. Eventually, Moore was able to reach a live IRS representative, who told him he was only entitled to $1,200.
“It’s frustrating,” Moore said. “Unfortunately there is enough stress with the death of a spouse without the IRS adding more.”
To make matters worse, this misstep was entirely avoidable.
In 2013, the GAO identified weaknesses in IRS processes that have allowed payments to be made to deceased individuals. The watchdog agency recommended corrective actions, which the IRS put in place. The agency is supposed to use death records to update taxpayers’ accounts to prevent improper payments.
But in the rush to get out the stimulus payments, this process was sidestepped. “Bypassing this control for the economic impact payments, which has been in place for the past seven years, substantially increased the risk of potentially making improper payments to decedents,” the GAO said in its report.
Gayle Griffith is the personal representative foradministering the estate of a friend, who died last November.
Under the Cares Act, estates aren’t eligible for a stimulus payment. Yet, Griffith received a letter from the IRS dated May 15 indicating her friend, Joan Duprey, who had lived in Honolulu, would receive a $1,200 stimulus payment by check or a debit card. But next to Duprey’s name were the letters “DECD,” indicating the IRS knew she was deceased. The promised funds haven’t arrived yet.
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Even with the federal deficit at an all-time high, trying to chase down $1.4 billion - a tiny percentage of the $2.2 trillion stimulus package - is futile, and unfair to the recipients, given that the IRS has a system in place that should have largely avoided sending stimulus payments to dead people in the first place.
On May 6, the IRS issued guidance about ineligible payments. To find the information, recipients had to know to go to the agency’s Economic Impact Payment Information Center page at irs.gov and navigate through the frequently asked questions. “Ineligible payment recipients who do not visit IRS’s website or do not have Internet access may not be aware of the process to return payments,” the GAO report said.
The IRS doesn’t even have a plan to directly notify ineligible recipients on how to return payments, the GAO said.
“If they don’t provide a timely, clear way for people to send the money back, I don’t think that’s right to approach people to get it back,” said Griffith, who says she’ll return the money if it ever appears. “Ethically, I believe it should be given back. No question in my mind. But practically, I don’t think they’ve created a situation where people can easily do that.”
With the IRS still fielding a reduced staff because of the coronavirus pandemic, their attempts to snatch back the stimulus money aren’t cost-effective. The IRS is already overwhelmed, with the tax deadline delayed until July 15. Millions of paper returns with refunds due must be processed. Tax fraudsters trying to steal a lot more than $1, 200 have to be pursued.
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And the agency is still trying to send legitimate stimulus payments to eligible Americans.
Michelle Singletary can be reached at michelle.singletary @washpost.com.
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June 28, 2020 at 12:14PM
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No, the IRS should not try to claw back $1.4 billion sent to dead people. - The Boston Globe
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