President Donald Trump, Treasury Secretary Steven Mnuchin – and now the Internal Service (IRS – have called for all those who received funds sent in error; support checks for the coronavirus crisis on behalf of a deceased relative, return the money to the government.
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But experts say there is no law that compels people to do so.
Part of the more than 130 million payments made to taxpayers as part of the $ 2.2 trillion coronavirus financial aid package were sent to deceased individuals. That happened mainly because of the delay in reporting deaths. The same has happened with other federal stimulus payments, and according to tax experts it is practically inevitable.
However, this is the first time the IRS has asked the taxpayers’ families for a refund. deceased, funds sent in error. Some experts claim that the government may not have the legal authority to demand the return. They also hint that the move could only be the IRS’s response to pressure from the White House and the Treasury Department.
Trump and Mnuchin have publicly said in recent weeks that money sent to deceased taxpayers must be returned. But the IRS did not issue any formal guidance until this week. He updated his website on Wednesday to indicate that if a person died before payment was issued, the money should be returned. He also provided instructions on how to do it.
The IRS and the Treasury Department did not say what would happen if these funds were not returned or paid.
Former taxpayer rights advocate Nina Olson said no aspect of the law prohibits payments from going to the dead. And there is also no law that requires people to return money. He also noted that the wording on the IRS website does not specify that the law requires that funds be returned.
“We started with those two statements, and from there back,” said Olson, who now heads the Center for Taxpayers’ Rights, a nonprofit organization.
The Treasury Department did not respond to multiple requests for comment.
Aid payments were made to taxpayers based on information presented in their 2018 or 2019 tax returns. But they are considered a refund of their 2020 taxes. The government used prior tax forms to help speed up the issuance of payments to the public. with the aim of compensating for part of the economic devastation caused by the coronavirus pandemic.