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MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

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Ikea’s billionaire founder was so frugal that he bought clothes from flea markets and took free salt and pepper from restaurants
FinanceCoronavirus

Stimulus checks began arriving for millions this week—even the deceased

By
Laura Davison
Laura Davison
,
Erik Wasson
Erik Wasson
, and
Bloomberg
Bloomberg
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By
Laura Davison
Laura Davison
,
Erik Wasson
Erik Wasson
, and
Bloomberg
Bloomberg
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April 15, 2020, 8:00 PM ET
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Subscribe to Outbreak, a daily roundup of stories on the coronavirus pandemic and its impact on global business, delivered free to your inbox.

The government’s economic stimulus payments are being distributed to a wide swath of Americans, including some who are recently deceased.

When the money reached many Americans’ bank accounts on Wednesday, some recipients were surprised to find payments for spouses or parents who had passed away.

It’s an expected consequence of a program passed with urgency and meant to cover as many people as possible. The Internal Revenue Service is relying on data that is as old as 2018 in some cases, resulting in people who are no longer alive included in the payments.

The IRS declined to comment about whether the payments to the deceased would have to be repaid to the government. Generally the agency has said that recipients will not have to pay back any of the money.

Ok this is insane, but just the tip of the iceberg. This is a direct text to me from a friend. I called to confirm this actually just happened. pic.twitter.com/GBRPcmYMXW

— Thomas Massie (@RepThomasMassie) April 15, 2020

Representative Thomas Massie, a Kentucky Republican, said he was alerted to the situation by a text message from a friend whose late father received a payment.

“This stimulus program is ripe for waste, fraud and abuse and this dead person receiving a check is just the tip of the iceberg,” Massie, one of the few lawmakers who opposed the $2.2 trillion economic rescue bill, said in an interview. He said the government should move away from stimulus payments and reopen the economy.

Errors such as payments to the recently departed are a consequence of lawmakers trying to balance accuracy with getting the money into bank accounts and mailboxes quickly, said Gordon Gray, director of fiscal policy at the American Action Forum, a conservative policy research group.

“Congress erred on the side of speed, which nearly everyone agreed was the right answer in this case,” said Gray, a former tax counsel in the U.S. Senate. “The mechanisms we have to get money to people mean that some people have died since they last interacted with Treasury and as far as Treasury knows, that person should get a check.”

Michael Zona, a spokesman for the Senate Finance Committee, said the panel was looking into the issue.

The payments to the deceased were one of the glitches with the program as the payments began hitting bank accounts and the IRS launched a web page to let recipients see when their money will be sent and whether they will receive it by direct deposit or a mailed check.

Phyllis Jo Kubey, a tax preparer in New York City, said several of her clients received error messages after trying to access the IRS’s “Get My Payment” tool earlier Wednesday. The website said high demand was causing some delays.

The IRS said in a statement that the website is operating smoothly and more than 6.2 million taxpayers have successfully received their payment status while almost 1.1 million taxpayers have successfully provided banking information.

If the site volume gets too high, users are sent to an online “waiting room” for a brief period until space becomes available. The IRS said in a statement that the online tool will be updated once a day.

High demand

“The IRS urges taxpayers to only use Get My Payment once a day given the large number of people receiving Economic Impact Payments,” according to the statement.

The IRS began sending more than 80 million payments via direct deposit this week to middle- and low-income households. Mailed checks for those who don’t have bank account information on file will start going out next week, but it could take months for all the payments to be distributed.

Individuals earning up to $75,000 or couples earning up to $150,000 are eligible for a $1,200 payment per adult and $500 per child under 17. The payments phase out above that income level, and individuals earning more than $99,000 or couples with a combined income of $198,000 don’t get anything.

To see when payments will be sent, people will need to provide their Social Security number, date of birth and mailing address. Those wishing to submit bank account information also need to upload the adjusted gross income on their most recent tax return, as well as the amount of their most recent refund or amount owed.

People who filed tax returns in 2018 or 2019 can add bank account information to receive direct payments instead of waiting to receive a paper check.

The IRS released a separate website last week to allow people who aren’t required to file tax returns to provide their bank account information.

The agency will send recipients a notification about two weeks after they were scheduled to receive their payment with the details of how they should have received the money and how to report payments that don’t arrive.

To see when payments will be sent, people will need to provide their Social Security number, date of birth and mailing address. Those wishing to submit bank account information also need to upload the adjusted gross income on their most recent tax return, as well as the amount of their most recent refund or amount owed.

People who filed tax returns in 2018 or 2019 can add bank account information to receive direct payments instead of waiting to receive a paper check.

The IRS released a separate website last week to allow people who aren’t required to file tax returns to provide their bank account information.

More coronavirus coverage from Fortune:

—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Inside the surreal “Mask Economy”: Price-gouging, bidding wars, and armed guards
—The IRS just launched “Get My Payment” portal for tracking your stimulus check status
—Should you fear government surveillance in the coronavirus era?
—If you’ve been a little busy lately, here’s what’s going on with the 2020 election
—The coronavirus crisis is fintech’s biggest test yet—and greatest opportunity to go mainstream
—There are 32 authorized coronavirus tests so far—here’s how they differ
—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19

Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.

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