May 19, 2020 - Douglas Myser

IRS wants some relief checks back. The IRS has made some mistakes with the relief check program, and now Uncle Sam is asking for his money back. Ever since the CARES Act passed and promised coronavirus relief payments of up to $1200 per adult to millions of Americans, people have had questions---from who is eligible and who gets paid first, to how do you track your check, and what do you do if the payment is the wrong amount or was sent to the wrong bank account. Recently, the IRS tried to clarify one of the more puzzling matters: What should you do if a check issued to a dead person ? It's unclear how many widows and other family members of the recently deceased are in this situation right now. But on May 6, the IRS added new language to its FAQ page for Economic Impact Payments, stating that people who have died are not eligible for payments. IRS wants some relief checks back.

In fact, the IRS says any checks issued to dead people should be sent back or repaid. Here's exactly what the agency says: A payment made to someone who died before receipt of the payment should be returned to the IRS by following the instructions in the Q & A about repayments. Return the entire Payment unless the Payment was made to joint filers and one spouse had not died before receipt of the Payment, in which case, you only need to return the portion of the Payment made on account of the decedent. This amount will be $1200 unless adjusted gross income exceeded $150,000.

The new provision stating that payments to the deceased should be returned may come as a surprise. As MONEY has previously reported, tens of thousands of similar aid payments were mistakenly sent to dead people during the great Recession, likely due to a lag in the reporting of deaths to government agencies. Back then, there was little to no effort on the part of the IRS to get the payments to dead people back. What's more, in recent weeks many tax and legal experts have been under the impression that 2020 payments sent to dead people would probably not have to be returned. IRS wants some relief checks back.

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