The Internal Revenue Service (IRS) is walking back its previous guidelines that all stimulus checks mistakenly sent to dead Americans need to be returned. On July 10, the IRS updated its previously issued guidance on its website to state that such economic impact payments do not need to be returned. The Bureau of Fiscal Services (BFS) "has cancelled outstanding Economic Impact Payment (EIP) checks issued to recipients who may not be eligible."
According to a June published report by the U.S. Government Accountability Office (GAO), almost 1.1 million payments totaling $1.4 billion had been issued to the dead as of April 30. That large number was mostly due to the fact that the CARES Act, signed by President Donald Trump in late March, mandated that payments be distributed to eligible Americans as "rapidly as possible." To do this, the Treasury Department and the IRS used operational policies and procedures that had been put in place for the 2008 stimulus checks, "which did not include using [Social Security Administration] death records as a filter to halt payments to decedents." The IRS confirmed such in their new guidelines, which also clarified that in some instances, stimulus payments must be returned.
Those requirements pertain to stimulus payments sent to those who died before receiving their economic impact payment in the case that those payments have already been deposited into the corresponding bank account or the check has been cashed. In such instances, the IRS still says that they should be returned following the instructions previously posted.
To return a stimulus payment that was received via direct deposit or by a physical check that has since been cashed, one should "submit a personal check, money order, etc., immediately to the appropriate IRS location," which can be found by clicking here. Written on the check or money order should be made payable to "U.S. Treasury," "2020EIP," and the taxpayer identification number (social security number, or individual taxpayer identification number) of the recipient of the check. A brief note explaining the reason for the payment's return should also be included.
The IRS has not stated what the consequences could be for unreturned stimulus payments, and many experts have expressed doubt that the IRS would be able to come to collect it if they did not. According to a report from CNBC, the language of the CARES Act notes that Americans who get more money than they should have in their stimulus check should just keep it, and not try to return it. Meanwhile, senior policy analyst for the Tax Foundation, Garrett Watson, said that the IRS could have a difficult time tracking that money down, or collecting it if they find it.