Surprise Stimulus Recipients

Surprise Stimulus Recipients
  • President Trump signed the CARES Act into law in March.
  • Stimulus payments began mailing in April, but problems occurred almost immediately.
  • Reports indicate more than a billion dollars was sent to the deceased.
  • The IRS wants the money back from all ineligible people who received more money than they qualified for.

( – The rollout of the CARES Act Economic Impact Payments has been problematic, to put it mildly. In addition to delays and issues actually doling out the payment, checks were sent to people who shouldn’t have received them, including those who are dead or incarcerated. The IRS, however, isn’t just going to let survivors and jailbirds spend the money.

Prison Windfall

According to the IRS, thousands of inmates received stimulus checks they were supposed to be exempt from. Hundreds of thousands of dollars worth of direct economic payments were sent to people behind bars.

The tax agency wants the money back, but there’s a problem: the IRS is admitting there’s no legal basis to get the cash back. Spokesman Eric Smith told the Associated Press he couldn’t give “the legal basis” but the Treasury Department has been using the Social Security Act as guidance.

The CARES Act, however, does not have language that bars inmates from receiving the payments, so some legal experts don’t believe they have to give the money back.

Audit Reveals Shocking Number

As if that news wasn’t bad enough, a government watchdog revealed even more shocking figures. The Government Accountability Office found nearly 1.1 million payments were sent to dead people. This mistake cost roughly $1.4 billion.

Just like in the case of the incarcerated folks, the government wants the relief payments back from the survivors of the deceased. The language of the CARES Act doesn’t address the problem, though.

There was bound to be some snafus with the rollout. The IRS used tax returns to decide who was receiving what, so if a person filed a return and then died, the agency wouldn’t necessarily know. What will happen in both situations now is unknown, but this isn’t exactly the best time to misallocate more than $1 billion.

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