Received a stimulus check for a dead loved one? Here's what you should do - Buffalo News

Relatives of dead Americans who received stimulus payments on behalf of their loved ones and did not know what to do finally have some guidance from the Treasury Department.

“Do I keep it? Do I have to give it back? If I do, how do I do that? It’s an issue a lot of people are talking about,” said attorney Nathan Berti of Hodgson Russ, who specializes in estates and trusts.

“The bottom line? If the taxpayer was deceased before receipt of payment, they are not entitled to it,” Berti said. “It must be returned.”

Donald Scheifla, 80, a father of six, received a stimulus check this week for his wife, Elizabeth Scheifla, who was 77 when she died of lung cancer in May 2019.

Married for 54 years, Scheifla and his wife shared a modest home for 28 years on Peck Street off Broadway. Receiving the check rekindled memories, Scheifla said. He asked his daughter, Linda Jaszcz, 51, what he should do.

"I just couldn’t cash it. My wife is deceased. No one should collect money on her death,” Scheifla said as he sat with his daughter at his kitchen table. “I love her. We did everything together, and it hurts without her.”

The Internal Revenue Service has paid out more than $207 billion in coronavirus relief payments to individual taxpayers as part of the $2.2 trillion CARES Act passed by Congress in late March to inject cash into an economy stalled by the Covid-19 pandemic.

Individuals earning less than $75,000 received checks for $1,200, while married couples who made under $150,000 received $2,400.

Deceased taxpayers are not eligible for payment, Berti said. The guidance posted Wednesday by the IRS on its website was issued weeks after Treasury Secretary Steven Mnuchin acknowledged the mistake.

“The government is trying to put funds into the hands of taxpayers as soon as possible, and now in the rush to get the money out the door, they’re realizing they made some mistakes," Berti said.

The method of returning the checks is “quite cumbersome,” noted Berti, who detailed the process: “Write ‘void’ on the endorsement line on the back of the check and mail it to the Treasury Department at the address posted on the department’s website.

“Like income tax returns, the check must be sent to one of the regional process centers listed, depending on where the mailer resides. The check should be accompanied by a note explaining why the check was returned."

If the stimulus payment was automatically deposited in the deceased taxpayer’s account, or if it was cashed, the money must be immediately returned through a personal check or a money order to the appropriate processing center, Berti said.

The personal check or money order must include additional information that is specified on the IRS website. Berti suggested taxpayers return the payment by certified mail, return receipt requested.

There is one exception.

“If the payment was made on behalf of joint filers, and one of those filers is alive, the portion of the stimulus check applicable to the deceased must be returned,” Berti said. “Survivors are allowed to keep their portion of the impact payment.”

Whether the IRS will try to assess penalties if relatives do not return the money is unclear, according to Berti. No mechanism of enforcement has been indicated.

To cash the government check would be a fraudulent act, said Richard A. Romer, a certified public accountant with Allied Financial Partners.

"Taxpayers have a legal responsibility to return the check. The government is not wrong in saying it should be returned," said Romer, who also cautioned taxpayers.

"The stimulus checks you are getting are really misleading, and are really an advance on 2020 tax return. This is what many people don’t realize," Romer said. "A lot of people think it’s free money.

"For example, if you filed jointly with your spouse in 2019, and your spouse has since died, you are only entitled to $1,200, and you probably received a check for $2,400. If you cashed the check, you must refund the $1,200 in your 2020 return.

"The government was trying to do the right thing in getting money into people’s hands, but there were checks deposited in wrong amounts, and there are ramifications. It's an absolute mistake."

The mistake surprised Berti because the Social Security Administration maintains an index that records deaths reported to the federal government. The death index includes the deceased person's name, dates of birth and death and Social Security number.

“Social Security is very good at knowing when someone is deceased and reversing payments," Berti said. "It seems like there is a total glitch somewhere in this process. It’s not without precedent that the government doesn’t have the best records with respect to knowing who has died.”

Let's block ads! (Why?)

"Here" - Google News
May 11, 2020 at 04:00PM
https://ift.tt/2Aj5Ate

Received a stimulus check for a dead loved one? Here's what you should do - Buffalo News
"Here" - Google News
https://ift.tt/39D7kKR
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update