The IRS Continues to Send Checks to Ghosts | Citizens Against Government Waste

The IRS Continues to Send Checks to Ghosts

The WasteWatcher

As Congress prepares to consider President Joe Biden’s $1.9 trillion COVID-19 proposal only four weeks after a $900 billion package was signed into law on December 27, 2020, questions are being raised about both the cost and effectiveness of what would be the second largest “relief” bill following the $2.2 trillion CARES Act. Approval of the $1.9 trillion initiative would bring the total spending on pandemic relief to a whopping $5 trillion.  

One of the areas of concern is how the Internal Revenue Service (IRS) is sending out economic impact payments, which were first authorized at $1,200 per individual (phased out according to income) in the CARES Act. In a June 2020 report on improving the response to COVID-19 across federal agencies, the Government Accountability Office (GAO) noted that $2.6 trillion had been appropriated through four separate bills, and 160.4 million economic impact payments had been sent out by the IRS and Department of the Treasury. GAO noted that the Treasury Inspector General for Tax Administration found that almost 1.1 million payments worth $1.4 billion had been paid to dead people.  

Citizens Against Government Waste highlighted this waste of taxpayer dollars in an August 14, 2020, WasteWatcher blog post, noting that “after the GAO recommended that the IRS use the Master Death File to update its records and avoid improper payments, the agency failed to use this seven-year-old system to make sure the stimulus checks did not go to deceased individuals.” And it appears that this problem of failing to share the Social Security Administration’s (SSA) death information with the IRS has not been resolved as Congress looks at the $1.9 trillion Biden plan.

According to a January 11, 2021, IRS statement regarding the $600 payments included in the Consolidated Appropriations Act, 2021, “Because of the speed at which the law required the IRS to issue the second round of Economic Impact Payments, some payments may have been sent to an account that may be closed or, is no longer active, or unfamiliar.” 

These continued problems with sending checks to deceased individuals could have been avoided. On June 30, 2020, the Senate passed S. 4104, the Stopping Improper Payments to Deceased People Act. This legislation would allow the SSA “to share its full file of death information (including State death data) with the Department of Treasury for the purposes of operating its Do Not Pay (DNP) working system and administering its Economic Income Payments (EIPs).” The legislation would also allow the SSA to provide its complete death information to federal and state agencies that provide benefits funded by the federal government.  

Unfortunately, the House of Representatives failed to take up the measure, meaning improper payments will continue to be made by the Treasury and other federal agencies not only to deceased individuals but also others who are ineligible to receive such payments. Along with his massive $1.9 trillion “relief” and “stimulus” bill, President Biden should call on Congress to enact legislation like S. 4104 to give taxpayers at least some confidence that billions more in COVID-19 economic impact payments and other federal programs will not be made to deceased individuals.

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