IRS Is Canceling Stimulus Checks Sent out in Error: Update

President Donald Trump's name is seen on a stimulus check issued by the IRS to help combat the adverse economic effects of the COVID-19 outbreak, in San Antonio, Texas, on April 23, 2020. (Eric Gay/AP Photo)

The Internal Revenue Service (IRS) announced that stimulus checks that were sent out in error will be canceled.

The canceled checks include ones that were sent out to deceased people. The Government Accountability Office (GAO) recently said that about 1.1 million people received checks in error.

The IRS and Bureau of Fiscal Services (BFS) said in an FAQ section of the IRS website that checks that have been canceled should still be returned to the federal government.

“After further review, it was determined that those who died before receipt of the [economic impact payment] should not receive the advance payment, also known as EIP. As a result of the review, IRS and the Bureau of Fiscal Services (BFS) took action to prevent future payments to deceased individuals. The cancellation of uncashed checks is part of this process,” the IRS wrote on July 10.

The BFS, meanwhile, has canceled outstanding stimulus “checks issued to recipients who may not be eligible, including those who may be deceased,” the website said. The Treasury Department is “encouraging financial institutions and other check cashing entities to determine the status of EIP checks by using Treasury check verification tools,” according to the website.

“A payment made to someone who died before receipt of the payment should be returned to the IRS by following the instructions 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,” the IRS added.

To return a stimulus check, one should write “void” in the endorsement section on the back of the check and send it to a relevant federal agency.

The payments were authorized in March’s CARES Act, which was passed to offset losses suffered during the CCP (Chinese Communist Party) virus pandemic.

In testimony before a House panel in June, GAO chief Gene Dodaro, said his own mother, who is deceased, received a $1,200 stimulus payment from the federal government earlier this year.

“My sister got it; of course she returned it,” he said. “A lot of other people didn’t know” they’re supposed to return the money, he added.

“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,” he said. “Then it became known publicly, Treasury then reevaluated that position and stopped it.”

In early July, the Senate passed legislation to stop payments from being sent to dead people.