AUDIT FINDS $1.4 BIL. IN VIRUS RELIEF WENT TO DECEASED RECIPIENTS

WASHINGTON — Nearly 1.1 million coronavirus relief payments totaling some $1.4 billion went to dead people, a government watchdog reported Thursday. Legal and political issues hang over the misdirected taxpayer funds, the latest example of errors in massive aid being dispensed at crisis speed.

As of May 31, about 160 million so-called economic impact payments totaling $269 billion were sent to taxpayers as part of the $2.4 trillion coronavirus relief package enacted in March. The Government

Accountability Office, Congress’ auditing arm, cited the number of erroneous payments to deceased taxpayers in its report on the government programs.

While the government has asked survivors to return the money, it’s not clear they have to.

It also may be a politically sensitive gambit for the Treasury Department to aggressively seek to claw back the money, especially because some recipients may have died in the early months of this year from COVID-19.

When billions in aid are rushed out the door in a crisis, “these are the kinds of things that happen,” said Lisa Gilbert, executive vice president of advocacy group Public Citizen.

Gilbert acknowledged the sensitivity of the issue. But, she added, “it’s a big number, particularly at this moment when our economy is in free-fall. It’s a large amount of taxpayer money that’s not doing what it was intended to do.”

The errors occurred mainly because of a lag in reporting data on who is deceased. It’s a lapse that tax experts say is almost inevitable.

The IRS asked in May for the money back from the deceased taxpayers’ survivors. Some legal experts have said the government may not have the legal authority to require that it be returned.

Treasury pointed to its current guidance, indicating the government’s position remains that survivors must return the money to the IRS.

“I think the IRS will do little or nothing to pursue collection of these payments,” Keith Fogg, clinical professor at Harvard and an expert in tax law, said Thursday. “The cheapest way for the IRS to collect is offset of a future refund. That avenue will not exist for these taxpayers.”