IRS Requests Return of Improperly Issued Stimulus Payments
In late May, the IRS announced that they had sent out approximately 152 million economic relief payments for a total of $258 billion. However, some checks were sent to either deceased taxpayers, foreign-based workers, or incarcerated individuals. The IRS has requested these individuals to, as Spike Lee would say, “Do the right thing”.
You may find it interesting that the IRS has requested that these payments be returned, they did not demand for the payments to be returned. This is an interesting point because there is no indication as to whether or not the agency has the authority to require these individuals to return the economic relief payments. For those who have decided to return their economic impact payment, here are some tips from the IRS.
For those who received tangible checks or debit cards, the IRS has requested that they be returned via US mail. For those who received direct deposits, the IRS has requested that the individual write a personal check to the IRS for the amount received from the economic income payment in addition to the individuals’ taxpayer ID number. All taxpayers are also advised to include a brief explanation for why the payment is being returned.
Please be reminded, there is no mandate to return an economic impact payment and the Coronavirus Aid, Relief and Economic Security (CARES) Act that created the payments doesn't have any provision to claw back the stimulus money once it's been distributed. The professionals at The Center for Financial, Legal, and Tax Planning are more than knowledgeable with regards to economic impact payments and any other tax matters whether or not they are related to COVID. Please contact us at (618) 997-3436 with any questions.