IRS says Treasury has cancelled outstanding stimulus checks issued to dead people

The Treasury Department has cancelled some coronavirus relief payments sent to deceased individuals, the IRS said.

Treasury’s Bureau of Fiscal Service “has cancelled outstanding Economic Impact Payment (EIP) checks issued to recipients who may not be eligible, including those who may be deceased,” the IRS said late last week in an update to its frequently asked questions webpage about the checks.

The IRS added that recipients of checks for deceased individuals should still return them to the agency.

Congress passed a coronavirus relief bill in March providing one-time payments for most Americans of up to $1,200 per adult and $500 per child.

Individuals making up to $75,000 and married couples making up to $150,000 are eligible for the full payment amounts. The payment amounts are then reduced for households with incomes above those thresholds, and individuals making more than $99,000 and married couples with no children making more than $198,000 are not eligible for any payment.

A report issued earlier this month by the Treasury Inspector General for Tax Administration (TIGTA) found that the IRS correctly computed the payment amount for about 98 percent of the payments issued through May 21, but that some payments were incorrect.

About 1.2 million of the payments issued as of May 21 – less than 1 percent of the total – were issued to dead people. Those payments totaled about $1.7 billion, TIGTA said.

IRS Commissioner Charles Rettig said at a congressional hearing late last month that the agency initially issued checks to dead people because it was following procedures used for stimulus payments issued in 2008. After the agency had been issuing payments for three weeks, Treasury issued guidance indicating that payments should not go to the deceased, and the IRS made changes to its processing, he said.

The news that Treasury has cancelled stimulus payments issued to dead people comes as lawmakers consider whether Congress should provide for a second round of checks in future coronavirus relief legislation.

Senate Majority Leader Mitch McConnell (R-Ky.) has suggested that a second round of direct payments could be included in another bill, but could be more targeted to low-income households.