Some eco­nomic im­pact pay­ments that went out to tax­pay­ers were sent to dead peo­ple, mainly be­cause of a lag in data on who is de­ceased.

Orlando Sentinel - - Front Page - By Sarah Skidmore Sell

Pres­i­dent Don­ald Trump, Trea­sury Sec­re­tary Steven Mnuchin — and now the IRS — are urg­ing peo­ple who re­ceived coro­n­avirus re­lief pay­ments for a de­ceased tax­payer to re­turn the money to the gov­ern­ment.

But le­gal ex­perts say there is no law re­quir­ing peo­ple do that.

Some of the more than 130 mil­lion eco­nomic im­pact pay­ments that went out to tax­pay­ers as part of the $2.2 tril­lion eco­nomic re­lief pack­age were sent to dead peo­ple. That hap­pened mainly be­cause of a lag in re­port­ing data on who is de­ceased. It’s hap­pened with past fed­eral stim­u­lus pay­ments, and tax ex­perts say is al­most in­evitable.

How­ever, this is the first time the IRS has asked for the money back from the de­ceased tax­pay­ers’ sur­vivors. Some law ex­perts say the gov­ern­ment may not have the le­gal au­thor­ity to re­quire it be re­turned. They also sug­gest the move may be just the IRS re­spond­ing to pres­sure from the White House and the Trea­sury Depart­ment.

Trump and Mnuchin have both said pub­licly that money sent to de­ceased tax­pay­ers should be re­turned. But the IRS didn’t is­sue any for­mal guid­ance un­til re­cently. On May 6, it up­dated its web­site, stat­ing that if a per­son died be­fore the pay­ment was is­sued, the money should be re­turned. It also pro­vided in­struc­tions on how to do so.

The IRS and Trea­sury did not say what would hap­pen if these pay­ments were not re­turned or oth­er­wise re­paid.

For­mer Tax­payer Ad­vo­cate Nina Ol­son said that there is noth­ing in the law pro­hibit­ing pay­ments from go­ing to the de­ceased. Nor is there any­thing in the law re­quir­ing peo­ple to re­turn the pay­ments. She noted that the lan­guage used on the IRS web­site does not say that re­turn­ing the pay­ments is re­quired by law.

“We are start­ing from these two sound­bites and work­ing back­ward,” Ol­son, who now runs the non­profit Cen­ter for Tax­payer Rights, said.

The Trea­sury did re­spond to mul­ti­ple for comment.

The re­lief pay­ments were made to tax­pay­ers based on the in­for­ma­tion filed on their 2019 or 2018 taxes. But it is con­sid­ered a re­bate on 2020 taxes. The gov­ern­ment used the prior tax forms to help speed along pay­ments to the pub­lic to off­set some of the eco­nomic dev­as­ta­tion from the coro­n­avirus pan­demic.

The prob­lem is, some peo­ple who filed those taxes may no longer be alive. Those pay­ments are sent to an heir or ex­ecu­tor of their es­tate. If the pay­ment is based off a fi­nal tax re­turn com­pleted af­ter their death, an eco­nomic im­pact pay­ment check may even de­note that the per­son is de­ceased next to their name.

It’s con­fus­ing at best. But it is also would be a le­gal and lo­gis­ti­cal mess for the gov­ern­ment to try to take back all the money that are not re­quests un­likely to be pur­sued, Ol­son and oth­ers said.

“They don’t have a le­gal leg to stand on,” she said.

The coro­n­avirus res­cue pack­age, which in­cluded the re­lief pay­ments, was passed at the end of March. The gov­ern­ment started is­su­ing the pay­ments in April. There is no of­fi­cial count of how many pay­ments went to dead peo­ple.

Bryan Camp, a law pro­fes­sor at Texas Tech Uni­ver­sity, is more cau­tious. He said that the le­gal­ity of the pay­ment may de­pend more on when the per­son died. If some­one died in 2020, they should be due the money but be­fore that, likely not.

The IRS guide­lines are more fuzzy — only that the death must be prior to the pay­ments, some of which are still pend­ing. Ol­son and oth­ers, in­clud­ing Keith Fogg, a clin­i­cal pro­fes­sor of law at Har­vard, don’t ex­pect the gov­ern­ment will go to ex­treme mea­sures to claw back the money. The gov­ern­ment would be hard pressed to prove sur­vivors weren’t en­ti­tled to the pay­ments in the first place as the law is writ­ten.

“Some­one dies in March of COVID-19, re­ally you are go­ing to say (to their sur­vivors) that you you have to re­turn that pay­ment?” Ol­son said. “No. I’ll take that law­suit.”


A stim­u­lus check is­sued by the IRS to help com­bat the ad­verse eco­nomic ef­fects of the COVID-19 out­break.

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