Economy

Feds sent coronavirus stimulus checks to 1.1 million dead people

Feds sent coronavirus stimulus checks to 1.1 million dead people”

The federal government sent coronavirus stimulus payments to almost 1.1 million deceased people totaling close to $1.4 billion, Congress' independent watchdog said Thursday in revelations first reported by The Washington Post. As of May 31, the GAO found that the Treasury Department had issued 160.4 million payments totaling $269.3 billion, "including payments to more than a million deceased individuals".

According to the USGAO, the payments to dead people happened because the system used to send out the payments was based on that used during the Great Recession of 2008, was not synchronized between the Internal Revenue Service (IRS) and the USA treasury, and did not use death records as a filter.

Treasury officials told the GAO that "upon learning that payments had been made to decedents, Treasury and IRS, in consultation with counsel, determined that a person is not entitled to receive a payment if he or she is deceased as of the date the payment is to be paid".

"Treasury and IRS did not use the death records to stop payments to deceased individuals for the first three batches of payments because of the legal interpretation under which IRS was operating", the GAO explained, adding that starting with the fourth batch onwards, full death data was made available on a temporary basis to filter out decedents.

As the Washington Post noted, the IRS has previously ruled that stimulus checks issued to dead people are required to be returned, but there is now no plan on how to accomplish this, and no steps have been taken other than an announcement posted on the IRS website on May 6 declaring that a "payment made to someone who died before receipt of the payment should be returned to the IRS".

"Where's the Republican oversight?" said Sen. House Democrats have pushed for more payments to households.

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In particular, the Small Business Administration rebuffed attempts to get information on the $349 billion it has distributed in loans under the Paycheck Protection Program.

Congressional oversight panels also faced difficulties in getting information about PPP loans from the administration, though they recently reached an agreement on access to more information.

GAO's chief, Comptroller General Gene Dodaro, will testify to Mr. Clyburn's committee Friday about the findings, and it's likely the stimulus payments will be a major focus, even though the Treasury Department says that issue is behind it.

"IRS has access to the Social Security Administration's full set of death records, but Treasury and its Bureau of the Fiscal Service, which distribute payments, do not", said the report, recommending that "Congress provide Treasury with access to the Social Security Administration's full set of death records, and require that Treasury consistently use it, to help reduce similar types of improper payments".

Part of the problem is that the checks were based on IRS data, but were mailed by the Treasury Department.

The tax agency also said it's anxious fraudsters are stealing payments by going online, accessing taxpayers' accounts through stolen identity information and routing future payments to their own bank accounts.



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