Stimulus payments are being deposited in bank accounts for dead people.
In 2009, the government lost $12 million when mistaken payments were sent.
Questions remain about whether survivors can keep the money.
A Kentucky congressman blames Congress for the mistakes.
(NewsReady.com) – On April 12, the IRS started depositing the first round of COVID-19 stimulus payments in Americans’ bank accounts. By and large, it has been successful and people around the country are getting the money they desperately need. Unfortunately, some people getting the money don’t really need it — they’re dead.
They Don’t Need Money Where They Are
On April 15, Fox News reported multiple instances of deceased individuals receiving stimulus checks. Rep. Thomas Massie (R-KY) tweeted about it.
Ok this is insane, but just the tip of the iceberg. This is a direct text to me from a friend. I called to confirm this actually just happened. pic.twitter.com/GBRPcmYMXW
— Thomas Massie (@RepThomasMassie) April 15, 2020
The congressman spent much of the day retweeting similar stories from people across the country. One woman said her father received one even though he died almost a year ago.
My deceased father of almost a year received his. DM'd you.
— Erin Kurinsky (@kurinsky_eo) April 15, 2020
Another woman had a financial windfall after the IRS deposited her dead husband’s stimulus payment in her account, as well. She doesn’t plan to go on a shopping spree.
$2400 was deposited in my checking account because I had direct deposit on my taxes last year. Sadly my husband died and cannot spend his $1,200.
— Lois Traver (@zureds) April 15, 2020
Other family members have no idea what they’re supposed to do with the money. Adam Markowitz, the vice president of Howard L Markowitz PA, CPA, told MarketWatch, some of his clients are receiving the extra $1,200 stimulus payments, too. He said the IRS has nothing that prevents cash from being sent to the dead.
Some tax experts believe the survivors won’t have to return the benefits.
Not The First Time It’s Happened
In 2009, President Barack Obama’s administration sent stimulus payments to Americans during the Great Recession. Like now, thousands of people received payments meant for their dead loved ones. Reports found over 71,500 Social Security recipients who’d passed away were given stimulus checks.
The Inspector-General later reported about half of those payments were sent back to the IRS. The former head of Taxpayer Advocate Service, Nina Olson, said those who returned the money could have kept it. She believes the same to be true for the current situation.
Olson points out the IRS isn’t the problem, Congress is. When lawmakers wrote the CARES Act, they didn’t add a provision requiring survivors to return the payments. Nicole Kaeding, an official with the National Taxpayers Union Foundation, agrees.
The Treasury Department and IRS have not issued guidance on what to do yet.
Rep. Massie told MarketWatch, Congress made many mistakes by rushing to get the checks out and “fraud will be rampant.” It certainly looks like he’s right. The payments are meant for living Americans, but thousands will get double payments and who’s paying for that? Taxpayers, that’s who.
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