The IRS has paid out more than $207 billion in Coronavirus relief payments to individual taxpayers, as part of the $2 trillion package passed by Congress known as the CARES Act.
And among the recipients of those $1,200 payments are the bank accounts of dead individuals — a problem that could impact millions of American families.
Bob L’Hommedieu’s father passed away in December after a long battle with dementia. So L’Hommedieu notified the Veteran’s Administration and the Social Security Administration that his father had passed, and payments from those agencies were halted. But on April 15 he noticed a payment in the amount of $1,200 in his late father’s account.
It was a Coronavirus relief payment from the IRS.
“I feel bad that this money is sitting in my dad’s account,” says L’Hommedieu, who lives in Houston. “I don’t know what to do with it. And there are people out there that need it badly.”
“And, you know, that bothers me. Quite a bit. I wish I knew what to do with it, but, you know, I don’t,” he added.
L’Hommedieu reached out to his two United States Senators in Texas. One sent a form letter that didn’t answer his questions. The other told him to contact the IRS. Treasury Secretary Steven Mnuchin told The Wall Street Journal one week ago that heirs should return the money sent to deceased individuals. But people who talked to NPR said they had more questions than answers.
“There’s mass confusion,” said Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center. “There’s been no official guidance as to how, in this instance, people should return the money that was received for their loved ones.”
The IRS did not answer questions about the payments, but the scope of the problem has the potential to be vast. The CDC estimates that 2.8 million Americans died in 2018, for example. And there are signs that people who died more than two years ago have received payments.
Karen McClure, of Fort Collins, Colo., says her mother passed away in January of 2018. But in April of this year her late mother’s bank account received a payment of $1,200.
McClure said she reached out to her local congressman but hasn’t heard back.
“The government is being very reactive instead of proactive to this situation — which I find frustrating,” she says.
Mark Everson, who served as IRS Commissioner from 2003 to 2007, says that the IRS has generally been doing a good job, “but there’s a real trade-off of speed versus accuracy in the processing,” he says. “There’s a lot of pressure to move quickly, and in the past Treasury and the IRS have been criticized because they haven’t moved quickly enough.”
Everson says that people in this situation should rely on official guidance from IRS.gov.
Teresa Wilmot, a 71 year old in Rockford, Ill., has been trying to do just that. She lost her partner of 39 years, Frank Dika, just two months ago. Last month, she noticed a payment in his account.
“I’m coping with [the] Frank stuff pretty well at this point. I’m not over it. I probably will never be over it,” she says. “But that part didn’t bother me. I’m probably angrier at the government for sending out a payment to somebody who’s deceased.”
Wilmot has been trying without success to find guidance online from the IRS to send the money back.
“I went online to the address on the letter and looked for a long time trying to find some way that I could first send the payment back. And I couldn’t find that,” she says. “So I look for a way to contact somebody at the IRS or the Treasury or whatever to return the payment. And I couldn’t find that.”
After multiple requests, the IRS declined to answer questions and directed them to the Treasury Department.
The Treasury Department has not responded to questions about what the IRS is doing to address the issue and what families should do if a deceased loved one has received a payment.