Lawyers for Trump said the stated reason for seeing the returns, to examine how the IRS audits presidents, is simply a pretext for wanting to look for something embarrassing.
Source: https://www.nbcnews.com/politics/donald-trump/trump-seeks-block-treasury-department-handing-over-his-tax-returns-n1275907
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The Article Was Written/Published By: Pete Williams
Source: https://www.cnbc.com/2021/05/20/us-treasury-calls-for-stricter-cryptocurrency-compliance-with-irs.html
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Knowing Stone, he’s bound to spend the next several months complaining that he’s being persecuted by the government. But according to the IRS, he’s no victim.
Source: https://www.nbcnews.com/think/opinion/roger-stone-s-irs-tax-troubles-highlight-classic-rich-person-ncna1265173
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The Article Was Written/Published By: Leslie Book and Marilyn Ames
The Justice Department is suing political strategist and longtime Donald Trump adviser Roger Stone for almost $2 million in unpaid taxes, penalties and interest, dating back more than a decade.
The civil suit, filed Friday in federal court in West Palm Beach, Fla., makes several references to Stone’s indictment two years ago on charges he tried to deceive Congress and threatened a witness during investigations into alleged ties between the Trump campaign and Russia.
The suit says that at the time of his indictment Stone was making regular payments to the IRS on a tax debt of about $1 million he ran up from 2007 to 2011, but after the criminal case was brought by Special Counsel Robert Mueller, Stone stopped paying. Stone also failed to pay about $400,000 in taxes and penalties owed on his 2017 return, the suit alleges.
Soon after Stone was arrested in a controversial morning FBI raid at his Fort Lauderdale residence in January 2019, Stone and his wife Nydia moved to a nearby condominium apartment that was purchased by a trust she controlled. The suit alleges that financial move and others were fraud aimed at preventing the IRS from collecting the money Stone and his wife owed and still owe to the feds.
In a statement, Stone said he would fight the suit, adding: “That my wife and I owe a significant amount in federal taxes has been a matter of public record for several years. This is not news. We had worked diligently with the IRS to pay down our debt until we were financially destroyed by the politically motivated and corrupt Mueller investigation. The claim that my wife and I are living a lavish lifestyle is a laughable joke in view of the fact that we are virtually bankrupt. This is a clear sign that the smear campaign of ‘guilt by association’ to tie me baselessly to the illegal events of January 6th has failed.”
The new suit against Stone was “authorized and requested by the Chief Counsel of the Internal Revenue Service, a delegate of the Secretary of the Treasury of the United States, and is commenced at the direction of the Attorney General of the United States,” according to Christopher Coulson, an attorney in the Justice Department’s Tax Division, who signed the suit.
The Justice Department is asking a federal court to require the Stones to repay the nearly $2 million they owe, plus interest and any other “statutory additions.” It’s also seeking that the court declare that transfer of Stone’s residence to the Bertran Trust “fraudulent” and declare that the Roger and Nydia Stone remain the true owners of the property.
In the criminal case, a jury convicted Stone of all seven felony charges he faced. A judge sentenced him to nearly three-and-a-half years in prison.
However, just before Stone was scheduled to report to prison, President Donald Trump stepped in with a commutation even as Stone vowed to press on with his appeals. Just before Christmas, Stone received a full pardon from Trump.
Stone’s name has also arisen repeatedly in the ongoing prosecution of the Oath Keepers militia for breaching the Capitol on Jan. 6. Several of the leaders of the group charged in the attack were part of a security detail for Stone on Jan. 5 and 6 ahead of the Capitol breach. Stone has said he had no knowledge of their plans to march on, and enter, the Capitol.
Stone’s finances have long been a feature of his desperate fundraising emails. He’s described his net worth as having been decimated by his efforts to fight the criminal charges against him. He also said his move from a house to an apartment in 2019 was due to financial stress brought on by his indictment. He also cited threats and security concerns after his arrest and the SWAT-team raid on his home was widely publicized.
Source: https://www.politico.com/news/2021/04/16/feds-roger-stone-tax-suit-482597
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The Article Was Written/Published By: Josh Gerstein and Kyle Cheney
The amount of taxes going uncollected by the federal government could be as much as $1 trillion or more per year, IRS Commissioner Chuck Rettig said Tuesday.
His estimate goes far beyond the official $441 billion difference between taxes paid and taxes owed annually, the so-called tax gap, reported by the IRS, which is based on figures from 2011-2013. The next official estimate will come out next year.
A confluence of factors suggest the tax-gap growth Rettig projected, including increased virtual currency holdings, which weren’t figured in the 2011-2013 period but now amount to more than $2 trillion worldwide, he said. In testimony before the Senate Finance Committee, Rettig also said counting foreign-source income and illegal-source income would increase the tab, too, and that IRS research indicates $175 billion in underpayments among the wealthiest Americans.
With all those reasons in mind, it wouldn’t be outlandish to think the tax gap “could approach and possibly exceed $1 trillion per year,” Rettig said.
What can help: Sen. Rob Portman (R-Ohio) said he’s crafting a bill to define virtual currency for tax purposes and improve information reporting on it. Finance Committee Chair Ron Wyden (D-Ore.) also asked Rettig what changes in law and regulations could improve the overall tax gap situation.
Rettig said better information reporting from third parties would help the IRS boost collections. He also called for more electronic tax return filing, error correction authority for the IRS and regulation of tax return preparers, in addition to requesting sustained budget improvements.
President Joe Biden just proposed a 10.4 percent increase in spending on the IRS, with most of the additional money tabbed for enforcement. Rettig admitted the IRS is currently “outgunned” in trying to keep pace with all tax avoidance and cheating.
Lots to do: Enforcement and collections aren’t the only mandates for the IRS, though. The agency in the past year has issued billions of dollars in economic relief Congress authorized to help individuals and businesses amid the coronavirus pandemic and has been given responsibility for delivering annual child tax credit payments more frequently throughout the year, beginning July 1, a source of concern for Republicans on the committee.
“To date, absent any contrary indication from the IRS, I am left with the impression that the aggressive July 1 payment deadline imposed by Congressional Democrats will be challenging to meet by an IRS staff that is already stretched thin, without cutting corners or reassigning staff who should be focused on processing tax returns,” Sen. Mike Crapo of Idaho, the top Republican on the committee, said in his opening statement at the hearing.
Both Democrats and Republicans quizzed Rettig on service shortcomings such as lengthy phone delays taxpayers experience when calling the IRS with questions. Rettig said call volumes have doubled over the past year and reached a peak of 1,500 calls per second at one point.
The IRS is still processing 1.7 million tax returns filed last year as part of a backlog that built up due to the pandemic impact on the IRS workforce. Mandatory overtime — including on weekends — is part of the effort to finish that work, Rettig said. The agency’s mail backlog grew to more than 20 million but has since been cut to a normal level, he said.
Source: https://www.politico.com/news/2021/04/13/irs-one-trillion-taxes-uncollected-annually-481128
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The Article Was Written/Published By: Aaron Lorenzo
The Social Security Administration (SSA) on Thursday sent the IRS data necessary to deliver coronavirus stimulus checks to people receiving government assistance after lawmakers expressed alarm that the payments were dela…
Source: https://thehill.com/homenews/house/544969-social-security-gives-irs-data-to-speed-delivery-of-covid-19-relief-checks
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The Article Was Written/Published By: Cristina Marcos
This year’s tax season is shaping up to be a gnarly one. The IRS has agreed to give Americans an extra month to file their taxes — but that’s barely going to be enough to help them and their accountants when it comes to navigating the new code.
Why it matters: The U.S. tax filing system is painful and complex — largely by design.
State of play: The new changes to the tax code include everything from health care costs to the child tax credit — all happening during a year when the pandemic caused millions of Americans to have more complex financial lives than usual, thanks to job losses, unemployment insurance, stimulus checks, and the like.
What they’re saying: This year “really has been much more complicated” than usual, says Julio Gonzalez, CEO of Engineered Tax Services. “We weren’t sure if stimulus checks would be taxable. We had so many individual changes. It’s been very challenging.”
Details: The code changes need to be turned into explicit guidance from the IRS, and reflected in updated tax-filing software. None of that has happened yet.
The big picture: Tax filing can be simple, free, and automatic. Countries like the U.K. and Spain have “return-free filing” for most taxpayers where they don’t need to file anything at all.
There are two reasons why the U.S. is an exception:
Source: https://www.axios.com/tax-season-irs-pandemic-91ae6dde-f63e-49fb-9d55-cf2fe6ad3238.html
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The Article Was Written/Published By: Felix Salmon
The delay in the tax-filing deadline could potentially postpone the launch of a new monthly child tax credit payment program, the head of the IRS warned Thursday.
Commissioner Chuck Rettig also said he expected that people will not have to file amended returns in order to claim a new tax break on jobless benefits.
Appearing before a House tax subcommittee, he rejected suggestions the agency postpone its deadline for filing quarterly estimated tax payments, as it did for annual returns.
And Rettig pushed back against complaints about a backlog of unprocessed tax returns at the agency, pointing to the coronavirus pandemic and recent tax legislation approved by Congress.
“The importance of getting through this is not lost on anyone,” he told the Ways and Means subcommittee on oversight.
His comments came one day after the IRS announced it was postponing the main tax-filing deadline until May 17 from the usual April 15, and amid an unusually difficult filing season for the agency.
The deadline postponement was demanded by lawmakers in both parties, and Rettig made clear he did not like the idea. That’s partly because it would make it harder for the IRS to launch the new child tax credit program — which involves creating a special Web portal for beneficiaries — that is supposed to open for business on July 1, he said.
“The same people who do our income tax processing” and stimulus check processing “are the people who need to develop that portal, so I don’t have the resources to devote to that portal until filing season ends,” he said. “We now have one month less to do the development.”
“We intend to do our best to get there — I’m hopeful that I don’t have to come to the committee to say that we’re unable to meet the statutory requirement” to launch by July 1.
The agency may not be able to distribute the payments on a monthly basis “right out of the box,” he added, noting the legislation calls for “periodic” disbursements.
As part of Democrats’ coronavirus legislation, they greatly expanded the child tax credit, especially for low-income people, and ordered the Treasury Department to devise a way for people to claim a fraction of the break throughout the year.
Regarding unemployment benefits, Rettig said the agency is still working out the kinks but that it expects to announce that people who’ve already filed their tax returns this year won’t have to amend them in order to take a new tax break on the first $10,200 in benefits they receive.
“We believe that we will be able to handle this on our own — we believe that we will be able to automatically issue refunds associated with the $10,200,” he said.
Some lawmakers complained about the agency not extending the deadline for estimated taxes, noting they’re paid by gig workers, for example. Rettig was not interested.
“There’s a large contingent of wealthy individuals in this country who do not make their estimated payments,” he said. “We’re not going to give them a break on interest and penalties.”
The deadline extension is “an accommodation for the most vulnerable individuals — we only extended the 1040 for individuals,” he said.
Source: https://www.politico.com/news/2021/03/18/irs-tax-deadline-child-tax-477112
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The Article Was Written/Published By: Brian Faler
Republicans are sure to oppose any such effort by the president and his Democratic allies.
Source: https://www.nbcnews.com/politics/joe-biden/biden-says-he-plans-small-significant-tax-hike-those-making-n1261292
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The Article Was Written/Published By: Allan Smith and Kristen Welker and Mike Memoli and Peter Alexander and Leigh Ann Caldwell
The IRS announced Monday that it is extending the tax-filing deadline to June 15 for victims of the winter storms in Texas.The extension applies to individuals and businesses in the entire state of Texas. Taxpayers…
Source: https://thehill.com/policy/finance/539951-irs-extends-tax-filing-deadline-for-victims-of-texas-winter-storms
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The Article Was Written/Published By: Naomi Jagoda
IRS phones are ringing off the hook even more than usual as tax filing season gets underway, but odds are slim — about 11-to-1 — that anyone’s answering, a frustration for taxpayers that’s sure to continue all year long.
The problem is that the IRS is still swamped with questions about last year’s tax returns, tax refunds, economic relief payments, tax credits and more, and none of the load is lightening. In fact, Congress is moving swiftly toward piling more on the agency’s plate.
It’s a “cascade effect” that “could not have come at a more challenging time,” said Pete Sepp, president of the National Taxpayers Union, a conservative-leaning group that, among other things, advocates for tax simplicity.
Added responsibilities from Congress, likely including a third round of direct coronavirus relief payments to households and bigger and more frequent Child Tax Credit payments, are sure to generate even more calls to IRS phone lines, which are well known for notoriously long waits for callers during normal times.
And these are anything but normal times, current call volume data show. Instead, the numbers right now indicate a deluge of calls pouring into the agency.
The IRS received 7.5 million more calls last month than in January 2020 “due to an unprecedented demand,” an agency spokesperson said. The surge is more than a 300 percent increase in phone demand coming from individual taxpayers and tax professionals.
Separately, National Taxpayer Advocate Erin Collins, the IRS’ in-house watchdog, said that only about one out of 11 calls to the IRS was being answered.
“This is going to be a really tough year for the IRS and a very tough year for taxpayers with respect to telephones,” Collins said.
The situation isn’t a surprise in the tax-preparer community. Many members of the American Institute of CPAs are telling the group’s leaders they can’t get through to the IRS when they dial the agency.
“There are still many challenges that people are facing; the need for relief is more important than it has been, and it is not going away,” said Melanie Lauridsen, AICPA’s senior manager for tax policy and advocacy.
Congress needs to boost IRS funding to improve the situation, Lauridsen said.
But that’s not likely to happen in the short-term.
Ken Corbin, the IRS’ chief taxpayer experience officer, told reporters last week that agency employees are working “extraordinary hours to make sure that we can get in as many calls as possible.”
As an alternative, the IRS is trying to steer taxpayers and tax professionals they hire to the agency’s website, which is meant to handle an array of basic questions.
But not everyone who needs IRS assistance has internet access or is web savvy.
Many of those still waiting on refunds from last year filed paper tax returns, which were caught up in processing slowdowns. The IRS closed processing sites temporarily in 2020 due to the pandemic, and paper tax returns and other correspondence built up into a mail backlog that numbered in the millions.
As of Jan. 29, the IRS had yet to process 6.7 million 1040 tax return forms, according to agency statistics.
Sepp said that taxpayers and practitioners will have to rely more than ever on private-sector software and other tools to get advice they need. Both he and Collins said many of the few taxpayers who actually get someone to pick up an IRS phone will be disappointed that an agency employee can’t fully answer their questions because they don’t have enough information at hand, sometimes because certain taxpayer data hasn’t been processed yet.
Collins’ Taxpayer Advocate Service, an in-house IRS watchdog, has a lengthy history of spotlighting the agency’s difficulties in handling phone calls, a problem flagged in TAS reports to Congress for years. But lawmakers don’t necessarily need those reminders, considering the regularity of constituent calls their offices receive complaining about the IRS.
The agency’s goal is to answer 60 percent of calls, a benchmark Collins said has the blessing of Congress. But she said that’s unacceptably low and, while almost 100 percent would be preferable, 80 percent would at least be more palatable.
“Americans deserve better,” Collins said. “Telephones are a fundamental service that the IRS should be providing to taxpayers.”
Source: https://www.politico.com/news/2021/02/16/irs-tax-season-469182
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The Article Was Written/Published By: Aaron Lorenzo
Millions of people who owe taxes and other money to the government are seeing their economic stimulus payments cut or wiped out to cover the debts because Congress peeled back a protection that had been in place for months.
The cuts may be particularly hitting those most in need of relief money because of the coronavirus pandemic, including veterans, Social Security recipients and students.
The problem has arisen because the IRS is redirecting stimulus payments for some people to settle unpaid federal and state taxes, Social Security and Veterans Affairs debts, student loan debt and child support obligations, according to the Taxpayer Advocate Service, an in-house IRS watchdog.
Congress had shielded previous payments from being rerouted for those types of things, except for unpaid child support, but moved the goalposts at the end of December, when it approved another round of stimulus payments of up to $600 per person.
Most of those payments went directly to households, through direct deposits or paper checks, and their money can’t be redirected.
But millions of others who didn’t get direct payments need to file tax returns this year and claim a recovery rebate credit, or RRC, to receive the stimulus money. Some 8 million households are in that boat, according to a recent Treasury Department estimate, and a good share of them might not get the credit because Congress directed the IRS to instead steer the money to cover various debts, National Taxpayer Advocate Erin Collins said.
That’s a reversal of policy from last March, when the initial round of stimulus payments went out with explicit instructions against rerouting the money to cover outstanding debts except child support.
The reason for the change is so far unknown.
Collins, who flagged the problem in a blog Thursday, said the IRS could fix it, at least for those who have federal tax debts. She suggested the agency use authority it has to bypass refund reductions for those who are experiencing economic hardship.
“Given the pandemic and the millions of individuals struggling with financial issues, I believe the IRS should use its discretion to issue RRCs without offset against federal tax debts,” Collins said. “The reality is that many of the taxpayers who are most likely to be subject to offset — because they cannot afford to pay their bills and have unpaid debts — are the ones who need relief the most.”
Normally, taxpayers have to apply for such relief, but Collins suggested it could be automatically granted for those who owe federal taxes and have incomes that are under 250 percent of the federal poverty level.
“After discussions with the IRS, I understand it has been looking into this issue and is exploring ways to exercise its discretion to help vulnerable taxpayers, taking into account the limitations of its IT systems, resource issues, and a rapidly approaching start to the filing season,” she wrote.
“While I recognize these inherent challenges, I strongly encourage the IRS to take the initiative to provide relief to taxpayers affected by the pandemic.”
An IRS spokesperson didn’t immediately answer a request by POLITICO for comment.
When glitches occurred with the previous round of stimulus payments, lawmakers stepped in and pressured the IRS to fix the problems.
For instance, after complaints from Capitol Hill, the Treasury Department and IRS agreed to make automatic payments to veterans who get VA benefits and typically don’t file tax returns. They initially had been told to file tax returns or enter basic personal information on an IRS website to receive the payments.
Source: https://www.politico.com/news/2021/01/29/stimulus-payments-government-debts-463802
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The Article Was Written/Published By: Aaron Lorenzo
The Treasury Department and IRS are working to get unclaimed economic relief payments to as many as 8 million households that haven’t yet received their due.
The undertaking, announced by the agencies Friday, is part of a broader initiative started by President Joe Biden’s executive order mobilizing the full federal government on various parts of Covid-19 relief and will include a web tool to help people find out if they’re eligible.
Much of the focus is on people not required to file tax returns.
“This is principally an issue associated with people who are non-filers, so they’re not filing income taxes in most cases because they don’t make enough to need to file federal income taxes,” National Economic Council Director Brian Deese said at a White House press briefing.
The planned online portal is an outgrowth of the existing IRS non-filer website established last year to help ensure names and contact information were registered for payments. Initial payments were distributed based on the past two years of tax return filings, but not all eligible recipients were in those databases since not everyone has to file tax returns.
Still waiting: Treasury and the IRS led two rounds of direct payments to individuals and households last year, the first following coronavirus aid legislation in March, the CARES Act, and then again after follow-up legislation was enacted in December.
A variety of hitches, though, prevented millions of eligible recipients from quickly getting the money they were owed, and many are still waiting.
“As many as 8 million households may be eligible for but have not yet received payments from the CARES Act signed in March; many of these households could be legally entitled to as much as $1,200 per adult,” according to a department fact sheet outlining the plan.
The goal is to swiftly get money out the door to help eligible recipients who for various reasons haven’t accessed their payments.
Other channels: In addition to the web tool, Treasury and the IRS will also reissue unclaimed economic relief payments from last year.
Hundreds of thousands of checks and debit cards authorized by the CARES Act were never cashed or activated. Some were accidentally thrown away. Debit cards, for example, were mailed in discreet envelopes that many people thought was junk mail or scam offers so they tossed them in the trash.
In addition to reissuing them, while turning off previously issued debit cards when new payments are made to help prevent fraud, Treasury and the IRS will also take outreach steps to encourage those who didn’t claim their benefits to do so on their 2020 tax returns due this year.
More education and awareness are needed in some cases, Deese said, noting plans to continue partnering with non-government groups to reach those missing out. The IRS worked through similar partnerships last year, too.
The underlying outreach will also attempt to connect with people who don’t have Internet access, or limited access, as well as those who don’t speak English.
Treasury and the IRS also plan to better target unserved households by leveraging information like addresses and zip codes on beneficiaries of other government assistance programs to pinpoint some who’ve missed payments.
Separate action: In addition to directing Covid-19 relief via executive order, Biden is taking other actions including quickly rescinding an executive order affecting Treasury and IRS personnel involved in tax regulations.
Lawmakers lauded Biden’s decision to eliminate the new Schedule F worker classification for all federal employees who work on regulations across the government, which would have stripped them of many labor protections. Former President Donald Trump issued the directive in October, telling agencies to start the Schedule F recharacterization on Jan. 19.
Critics said it would have effectively made rule-making federal employees the equivalent of political appointees — a negative for collecting taxes.
“The Ways and Means Committee previously called for this to be done, as it will preserve the nonpartisan nature of tax administration and limit the politicization of the federal government’s civil service,” Chair Richard Neal (D-Mass.) said in a statement.
Source: https://www.politico.com/news/2021/01/22/biden-treasury-unclaimed-stimulus-461466
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The Article Was Written/Published By: Aaron Lorenzo
Millions of pandemic stimulus payments were mistakenly deposited in the wrong customer accounts as the result of an Internal Revenue Service error, said Intuit TurboTax, which is helping distribute this new round of pandemic stimulus payments.
Here is the TurboTax statement. — Read the rest
Source: https://boingboing.net/2021/01/07/millions-of-pandemic-stimulus-payments-were-deposited-in-wrong-customer-accounts-due-to-irs-error-says-turbotax.html
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The Article Was Written/Published By: Xeni Jardin
Source: https://www.independent.co.uk/news/world/americas/nra-irs-wayne-lapierre-taxes-investigation-b814084.html
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The Article Was Written/Published By: Graeme Massie
House Ways and Means Committee Democrats on Tuesday called on the IRS to review the tax-exempt status of the National Rifle Association (NRA) and NRA Foundation.The members, led by Reps. Jimmy Gomez (D-Calif.) and…
Source: https://thehill.com/homenews/house/514690-democrats-call-for-irs-to-review-tax-exempt-status-of-nra
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The Article Was Written/Published By: Alex Gangitano
Taxpayers may be in for a long wait for refunds, as an estimated 4.7 million returns were backlogged at the IRS by mid-May because of the agency’s employee evacuation for the coronavirus pandemic, according to a National Taxpayer Advocate report released Monday.
“Although the IRS is reopening some of its core operations, it is not clear when it can open and log all the returns sitting in mail facilities,” the report said.
While more than 90 percent of individual tax returns filed annually to the IRS are sent in electronically, another approximately 10 million paper returns still arrive by mail.
The paper return pile-up — which the taxpayer advocate’s office computed through May 16 — started happening after the IRS in late March sent tens of thousands of employees home to limit the pandemic’s spread. Processing such documents can’t be done remotely, so IRS workers who’ve been recalled throughout June to resume more normal duties have just begun to address the paper return inventory.
The holdup in processing paper returns comes amidst an unusual filing season in which the IRS delayed the tax return deadline by three months to July 15 due to the pandemic. The agency also delayed numerous other taxpayer deadlines in the process, numbering more than 300 in total, according to the report.
Among other disruptions, it also said the IRS has had trouble processing applications for business taxpayers that have filed claims for the pandemic-related tax credit they can get for keeping employees on payroll. IRS phone lines and other taxpayer assistance processes like refund corrections have also been unusually hampered this year, in which much of the agency’s focus has shifted to distributing some 160 million economic stimulus payments.
The report was the first filed to Congress by Erin Collins, who took over as National Taxpayer Advocate earlier this year.
IRS Commissioner Chuck Rettig is scheduled to testify on this year’s tax filing season Tuesday in front of the Senate Finance Committee. Collins’s report said she’d submit a more comprehensive follow-up when the filing season is more complete.
Source: https://www.politico.com/news/2020/06/29/expecting-a-tax-refund-be-prepared-to-wait-344277
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The Article Was Written/Published By: Aaron Lorenzo
The IRS sent stimulus checks to more than 1 million people who had died because it initially believed it did not have the legal authority to withhold them, according to an independent watchdog.
The administration later reversed itself, and began trying to block payments going to the dead while asking survivors to return those that did slip through, the Government Accountability Office said in an analysis released Thursday.
The report does not say what prompted the agency to reverse course, when it decided to change direction or who made the decision.
Nevertheless, the account — included in an oversight report on legislation approved in response to the coronavirus outbreak — is the fullest description thus far of how payments ended up going to the deceased.
As of April 30, almost 1.1 million payments totaling $1.4 billion had been issued to the dead, the report said.
Though they represented a tiny share of the more than 160 million payments made, they received outsized attention, with critics calling them evidence of government mismanagement. In mid-April, President Trump said publicly he wanted that money returned.
Government veterans have said it is all-but-inevitable the dead would get paid when the IRS is under pressure to distribute payments as quickly as possible, even as the coronavirus was killing tens of thousands of people. Some outside experts had questioned whether the legislation approved by Congress gave the executive branch the power to stop the payments.
The GAO report makes clear that, at least for a time, the IRS believed that it did not.
According to the tax agency, the report says, the IRS first raised questions about payments going to the departed in late March, when Congress was still writing the legislation authorizing the checks.
“IRS counsel subsequently determined that IRS did not have the legal authority to deny payments to those who filed a return in 2019, even if they were deceased at the time of payment,” GAO said.
The IRS’s top lawyer said the same rationale applied to those who had filed a 2018 return, but not yet a 2019 one. (Under the coronavirus measure, the IRS was to determine whether someone was eligible for the $1,200-per-adult payments using returns going as far back as 2018.)
Because of that opinion, GAO said, the IRS did not initially screen payments with death records kept by the Social Security Administration.
An unnamed Treasury official offered a conflicting account of how the department learned of the payments, the report indicates, telling GAO it was not aware of the issue “until it was reported in various media outlets.”
“Treasury officials said that upon learning that payments had been made to decedents, Treasury and IRS, in consultation with counsel, determined that a person is not entitled to receive a payment if he or she is deceased as of the date the payment is to be paid.”
Officials decided they had the power to stop the checks under a 2019 law targeting improper payments. After that, GAO said, the IRS began cross referencing payments with government death records.
On May 6, the IRS announced those payments should be returned, and the agency subsequently included directives on envelopes containing the payments asking they be returned unopened.
The department though does not intend to spend much time hunting down the money, the report suggests.
“IRS does not currently plan to take additional steps to notify ineligible recipients on how to return the payments,” GAO said. “IRS should consider cost effective options for notifying recipients on how to return the payments; without which, ineligible recipients who would otherwise want to return the payment may be unaware how to do so.”
It’s unclear how many of those checks have been returned or how many direct deposits were not accepted — “the amount of which IRS and the Treasury are still determining.”
Source: https://www.politico.com/news/2020/06/25/irs-stimulus-checks-dead-people-339530
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The Article Was Written/Published By: Brian Faler
