The head of the Government Accountability Office (GAO) told lawmakers Friday that the IRS knew it was sending out stimulus payments to dead people — and even said that his own mother, who died in 2018, received one.
“What happened was: IRS initially determined that deceased people, or anybody who filed a return in 2018 or 2019 should be paid, so they knew they were paying people who were deceased,” Comptroller Gene Dodaro told the House select committee on the coronavirus crisis. “Then it became known publicly, Treasury then reevaluated that position and stopped it.”
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Dodaro testified a day after a GAO report was published that found that more than a million economic stimulus payments, totaling nearly $1.4 billion were sent out to people who were deceased.
The report, which looked at how the nearly $3 trillion CARES Act stimulus package was administered, said that the IRS typically uses third-party data such as death records maintained by the Social Security Administration to prevent erroneous tax refund claims.
But with the economic stimulus checks sent out in April and May in response to the COVID-19 crisis, the Treasury Department and the 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.”
IRS counsel reportedly “determined that IRS did not have the legal authority to deny payments to those who filed a return for 2019, even if they were deceased at the time of payment.” It also advised “discretion” provided for in the CARES Act (which authorized the payments) to apply the same set of rules to those who filed a 2018 return but not one in 2019.
Treasury officials also cited language in the CARES Act that demanded the payments be made as “rapidly as possible” as to why Treasury and IRS used policies and procedures developed in 2008 for stimulus payments, and consequently “did not use the death records as a filter to halt payments to decedents in the first three batches of payments” in an effort to fulfill that mandate from Congress.
Dodaro said that in order to stop the payments, the Treasury had to give Treasury’s Bureau of Fiscal Service, which makes the payments, temporary access to a death master file. He said he has urged Congress to pass legislation giving it permanent access to the file.
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He went on to say that even his own mother, who died more than two years ago, received a payment.
“My own mother received a payment, she unfortunately passed away in February 2018, and my sister got it on behalf of my mother and right on the check it said deceased,” he said, adding that the payment was returned.
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Dodaro said that since the report came out, a number of citizens have emailed saying they have checks that were mistakenly sent and are looking to return them. He renewed his calls for Congress to pass a legislative fix to the problem.
“Congress needs to pass this legislation. … I think its very important,” he said, arguing that it could affect other government payments too. “It could be payment for agriculture, education or whatever, so I’d encourage you to do that.”