The IRS is paying coronavirus pandemic benefits to dead people, the agency’s inspector general has revealed in a report, The Washington Times reported.
Due to a computer error, some 45,000 payments of the advance recovery rebate credit (which paid up to $1,400 per person) were distributed to deceased dependents of taxpayers, according to the Treasury inspector general for tax administration (TIGTA). The benefit was part of the Democrats’ $1.9 trillion pandemic relief legislation passed last year.
In addition, almost 26,500 more payments were made to taxpayers who died before the Jan. 1, 2021, cutoff date but whose dates of death either weren’t reported or weren’t yet verified by the IRS, according to The Washington Times.
Some of those payments were rejected by banks or returned as undeliverable, but almost 19,000 were indeed processed, TIGTA said.
Despite the errors, 99.48% of the 167.4 million payments the IRS made overall were correct, according to the report. In addition, of the American Recovery Act's $1.9 trillion price tag, recovery rebate credit payments to dead people totaled only a tiny fraction, about $92 million.
The inspector general pointed out that the IRS does not have the authority in general to demand repayment.
In the official IRS response to the audit, the agency said it is set up to collect money from people, not pay them, with Kenneth Corbin, commissioner of the wage and investment division, explaining that "the automated systems at our disposal for issuing the [payments] were designed for the purpose of assessing and collecting tax. As such, not all information needed to accurately calculate every payment was available with the [payments] were determined, even if it resided in other systems at the time."
However, the IRS did agree to consider additional safeguards to prevent payments to dead people if Congress enacts another round of stimulus payments, the Times reported.
The inspector general added that it warned the IRS about problems with erroneous payments during the first round of pandemic relief in 2020, but the agency didn’t follow through. Those warning came after there were approximately 4.5 million erroneous payments that year, which cost $5.5 billion.
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