Stimulus Check: IRS to Adjust Payment Errors for Eligible Americans

As millions of Americans await news of a possible second round of stimulus checks, some are still facing issues with their first direct payment. Passed under the CARES Act and first being distributed in mid-April, the first round of payments encountered a number of issues, which the Internal Revenue Service is now attempting to fix. According to Fox Business, the Taxpayer Advocate Service is now aiding the IRS in resolving payment errors, which resulted in some people not receiving the full amount they were eligible for or never receiving a check at all.

Those who may qualify for a corrected payment amount include people who used the IRS' non-filer tool and claimed at least one eligible dependent but did not receive stimulus money for that dependent, as well as eligible individuals who filed Form 8379, Injured Spouse Allocation but did not receive payment for their injured spouse. Other scenarios include victims of identity theft who did not receive a payment or received an incorrect amount. Those individuals will receive their payment when the identity theft issue is resolved. Additionally, those who filed a joint return with a deceased or incarcerated spouse and did not receive a check can also expect to have the IRS recalculate the amount and issue it to the "nondeceased/non-incarcerated spouse." The IRS will also work with taxpayers to resolve a math error that resulted in some individuals whose check was based on a 2018 or 2019 tax return receiving a lesser amount of the EIP.

The Taxpayer Advocate Service will begin helping the IRS in resolving these issues beginning on Monday, Aug. 10, with the IRS expected to begin correcting payments in the coming weeks. Those eligible for a corrected payment can expect to receive it in the same form as their initial payment, though those who had received the first payment via debit card will receive the corrected funds in the form of a physical check sent in the mail. Fox News notes some individuals will have to wait a little while longer, until they file their 2021 taxes, to receive the correct amount. Guidance to help individuals determine whether or not they can take action now or will have to wait is expected to be issued sometime soon.

As Congress works to pass the second round of payments, increased scrutiny has been put on the first round as lawmakers hope to avoid issues those payments had encountered. Along with the aforementioned scenarios, a June published report by the U.S. Government Accountability Office (GAO) found that 1.1 million payments totaling $1.4 billion had been issued to the dead. Thousands of Americans also mistakenly received two payments.