Government Tax Watchdog: IRS Shouldn’t Waste Time Searching for Billion-Dollar Stimulus Checks Sent to Deceased

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Less than a week after the Government Accountability Office said the Internal Revenue Service reduced stimulus checks to dead 1.1 million, a report released Monday by Erin Collins, the National Taxpayer Advocate said the tax collector Federal government had also sent about 74,000 checks to people who were stranded. by the police.

The National Taxpayer Advocate is an independent office of the Internal Revenue Service, although the two agencies frequently collaborate.

“The National Taxpayer Advocate recommends that the IRS not spend its resources pursuing enforcement actions against a deceased’s estate or a family member who has received an PIE for a deceased.”

Like the Government Accountability Office (GAO) reportCollins noted how the deceased received stimulus checks. (The new report says the IRS issued 965,000 checks, compared to 1.1 million checks counted by GAO.)

It’s unclear what the IRS will do if taxpayers don’t repay the stimulus payments, Collins said in a footnote.

“However, if the IRS made the payment when it had information in its possession that the person was in fact dead, the National Taxpayer Advocate recommends that the IRS not spend its resources pursuing legal actions. ” execution against the estate of a deceased person or a family member who has received a [economic impact payment] for a deceased, ”she added.

Last week’s GAO report said the IRS had access to Social Security Administration death records, but did not use them when distributing the first three batches of stimulus checks.

Incarcerated Americans Also Receive Stimulus Fund

Although the IRS says people in jail must return the money – just like relatives of deceased people who receive checks – the watchdog says the tax collector should be more specific about who must return the money. money.

“A situation could arise where a taxpayer was incarcerated in early 2020 but was released amid the pandemic – especially as a number of incarcerated people have been released to mitigate the spread of COVID-19 in the country’s prison system, ”Collins noted.

Nearly 96,000 people have been released from prisons and prisons as a result of the epidemic, according to a University of California, Los Angles Law School Database.

Some state agencies have intercepted the stimulus checks. For example, the Kansas Department of Corrections seized $ 200,000 in stimulus checks and returned them to the IRS, according to a spokesperson for the Department of Corrections.

Open ended questions about return rules for incarcerated people are an example of the wrinkles when the IRS distributed about 160 million direct stimulus payments under the Coronavirus Help, Relief and Economic Security Act ( CARES).

“While the IRS has done an impressive job in implementing the provisions of the [CARES Act] – especially in these unprecedented circumstances – there were several problems in the implementation of the most important provisions of the CARES law ”, said the report.

The IRS may need to quickly learn from any missteps and prepare for a second round of direct checks soon. Lawmakers are considering another stimulus bill and Treasury Secretary Steven Mnuchin has said a back-up plan could materialize next month.

The benefit information did not reflect whether some Social Security and veterans benefit recipients had dependents eligible for the $ 500, according to the report. The IRS has set May 5 for these people to add information about the children and get the extra money.

Although Collins said that “those cash-strapped people” could still claim dependents on their 2020 tax returns, it’s far from here. The IRS should continue to let them update their information and get the stimulus money for dependents, she said.

The GAO report also noted the problem of missing money for dependents. About 450,000 stimulus check recipients did not receive additional money for dependents in their stimulus payments, according to the report. The IRS finds the accounts and adds the additional payments by the end of next month, according to the GAO report.

The IRS said it welcomed the Collins report, which began its role earlier this year.

“In response to COVID-19, the IRS made stimulus payments in record time,” the IRS said.

Millions of Americans began receiving stimulus funds within two weeks of the passage of the CARES law in late March. “By comparison, for the last stimulus payments in 2008, the first 800,000 payments did not start reaching taxpayers for 75 days. Our extraordinary efforts to implement timely COVID-19 relief came in the midst of an unprecedented extended filing season. “

The National Taxpayer Advocate report offered further information on the extent of the distribution of stimulus checks.

About 23 million people submitted direct deposit information to get their checks faster, while 3.7 million people used the IRS ‘non-filing tool. The online portal provided the IRS with the information it needed to send stimulus payments to people who did not have a tax filing requirement.

COVID-19, the disease caused by the SARS-CoV-2 virus, had infected nearly 11.6 million people worldwide and 2.9 million in the United States as of Monday evening, according to official figures compiled by the Center for Systems Science and Engineering from Johns Hopkins University. The disease claimed at least 538,933 lives worldwide and 130,312 in the United States

The Dow Jones DJIA industrial index,
-0.75%
and the S&P 500 SPX,
-0.14%
open lower Tuesday; it ended up on Monday after better-than-expected unemployment figures last week amid a wave of coronavirus in states that relaxed restrictions.


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