Signs of a broken bureaucracy: Since July, 2020, the IRS had issued more than 4.4 million direct payments, worth about $5.5 billion, to individuals that were potentially ineligible, as noted by a recently released report by the Treasury Inspector General for Tax Administration. In fact, the report found that the IRS sent 2.1 million refund checks totaling $3.5 Billion that were believed to have been sent to dead people.
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IRS retrieves just a fraction of payments sent to ineligible recipients, including some who are dead
The IRS issued at least 4.4 million direct payment to potentially ineligible individuals
The IRS has so far collected just a small portion of the economic impact payments it sent to ineligible American households, including only a fraction of the large number sent to dead people, new data show.
As of July 16, 2020, the IRS had issued more than 4.4 million direct payments, worth about $5.5 billion, to individuals that were potentially ineligible, as noted by a recently released report by the Treasury Inspector General for Tax Administration.
That total includes more than 2.1 million checks that were believed to have been sent to dead people, totaling $3.5 billion.
The Treasury and IRS issued guidance asking for individuals – including nonresidents and relatives of decedents – to return the payments. That action resulted in the voluntary return of 65,447 payments as of Oct. 1, 2020 – totaling more than $80 million, the TIGTA report said.
Of the Treasury payments sent to the deceased, 59,500 were voluntarily returned, presumably by honest relatives.
Overall, researchers said that about 98% of payments were made to eligible households.
This tax season there were also amplified concerns about fraud as some people needed to file a return to claim the Recovery Rebate Credit in order to get their economic impact payments.
The IRS identified 457,325 returns related to economic impact payments that it considered questionable and sent them for review. More than 38,270 were deemed to be fraudulent.