Deceased received economic impact check

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PoppyA
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Deceased received economic impact check

Post by PoppyA » Sat May 02, 2020 3:24 pm

My Father passed in 2018. The estate is still open. I received an economic impact check today payable to: “Fathers name, deceased, my Name”. I am the executor.

What do you make of this?

Jags4186
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Re: Deceased received economic impact check

Post by Jags4186 » Sat May 02, 2020 3:27 pm

I believe Steve Mnuchin said if some dead gets a check it needs to be returned. I would return it because it’s likely to get clawed back with potential penalties in the future.

https://www.wsj.com/articles/stimulus-c ... 1588103323

Topic Author
PoppyA
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Re: Deceased received economic impact check

Post by PoppyA » Sat May 02, 2020 3:49 pm

I can’t access the article because I don’t subscribe. Where should it be sent? Did the article say?

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Nate79
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Re: Deceased received economic impact check

Post by Nate79 » Sat May 02, 2020 3:53 pm

I believe the IRS or Treasury will be coming out with guidance soon on how they will claw back or how to return the money. Just hold it until the instructions are available.

jpasc
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Re: Deceased received economic impact check

Post by jpasc » Sat May 02, 2020 4:28 pm

Same situation. I was the executor for my father's estate. He also passed away in 2018, the estate is closed.

My envelope has a box near the upper lest corner that says "If recipient deceased, Check here and drop in mailbox." That's exactly what I'm going to do.

TravelGeek
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Re: Deceased received economic impact check

Post by TravelGeek » Sat May 02, 2020 4:39 pm

PoppyA wrote:
Sat May 02, 2020 3:49 pm
I can’t access the article because I don’t subscribe. Where should it be sent? Did the article say?
Here is an article that quotes from the WSJ article. Seems like Mnuchin didn’t give any details and (personal opinion) the whole thing is a bit of a mess right now. I would hold on to the check and not cash it for the time being.

https://www.marketwatch.com/story/if-yo ... 2020-04-29

Flyer24
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Re: Deceased received economic impact check

Post by Flyer24 » Sat May 02, 2020 5:30 pm

Topic moved to Personal Finance.

chemocean
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Re: Deceased received economic impact check

Post by chemocean » Sun May 03, 2020 4:35 pm

Similar situation. Same format of addressees as deceased and executor.
The outside of the envelope that my deceased father's check came it had a warning about forgery and a box marked "If deceased, mark box and place in mail box". I dropped it in the mail box, mainly because I didn't what to explain why I kept it and why I had not filed a 2019 1041.
Hopefully, you still have the envelope that the check came it. I would suggest that if envelope does not have the box, mark deceased on the outside and drop the envelope in the mail box.
Since the addressee is labeled as deceased, someone at IRS might eventually figure out that a tax payer deceased in 2018 doesn't deserve a stimulus check. I think I remember a McConnell says that the only requirement for a US citizen to get the check is that they were breathing.

MarkBarb
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Re: Deceased received economic impact check

Post by MarkBarb » Sun May 03, 2020 5:05 pm

Similar situation. In our case, it was direct deposited into our account because that's what my wife used for the tax refund for her mother. I read what Treasury Secretary said, but many others have said that the law doesn't allow them to claw it back. It seems unlikely that the IRS will do it without legal authorization, especially since the bill explicitly allows people to keep money sent to them in error. I also doubt that congress will amend the law to let the IRS take money away from widows and orphans. We'll just split it with the other heirs and move on with life.

TravelGeek
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Re: Deceased received economic impact check

Post by TravelGeek » Sun May 03, 2020 5:11 pm

chemocean wrote:
Sun May 03, 2020 4:35 pm
I think I remember a McConnell says that the only requirement for a US citizen to get the check is that they were breathing.
That criteria qualifies me, but my 2018 tax return doesn’t. Should I reach out to the Dept of the Treasury or Sen McConnell’s office? :twisted:

Somewhat disappointing that they weren’t able to figure out how to suppress checks to deceased people and then even address them as deceased.

Seasonal
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Treasury wants stimulus payment to dead returned

Post by Seasonal » Wed May 06, 2020 1:30 pm

[Merged into existing discussion -- mod oldcomputerguy]

"The Treasury Department said Wednesday that people who received a stimulus payment on behalf someone who is deceased should return the money immediately. “A payment made to someone who died before receipt of the payment should be returned to the IRS,” Treasury said in a statement."
https://www.usatoday.com/story/news/pol ... 174588002/

Experts quoted in the articles I've seen doubt the IRS has the legal authority to compel repayment from anyone and especially not from those who were alive when the CARES Act was signed into law.

the way
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Re: Deceased received economic impact check

Post by the way » Wed May 06, 2020 2:51 pm

PoppyA wrote:
Sat May 02, 2020 3:24 pm
My Father passed in 2018. The estate is still open. I received an economic impact check today payable to: “Fathers name, deceased, my Name”. I am the executor.

What do you make of this?
This is what the IRS website says https://www.irs.gov/coronavirus/economi ... enter#more (Q41, also see Q10)

cdc
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Returning Stimulus Money to IRS

Post by cdc » Wed May 06, 2020 3:39 pm

[Merged into existing discussion - mod oldcomputerguy]

There have been a few threads on here (including mine) regarding what to do with stimulus money received in error. Today the IRS updated their FAQs to address returning stimulus money. See Q 41 at:
https://www.irs.gov/coronavirus/economi ... ion-center

mega317
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Re: Returning Stimulus Money to IRS

Post by mega317 » Wed May 06, 2020 3:50 pm

Thanks for the info. I like this part:
Submit a personal check, money order, etc., immediately to the appropriate IRS location
Does an IOU in crayon on a paper napkin count as etc.?
https://www.bogleheads.org/forum/viewtopic.php?t=6212

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Eagle33
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Re: Treasury wants stimulus payment to dead returned

Post by Eagle33 » Wed May 06, 2020 4:46 pm

Kiplinger article summaries the addresses of where to return decease's stimulus money and directions.

What to Do If You Get a Stimulus Check for a Dead Person
The IRS now has specific guidance on what to do if you receive a stimulus check for a deceased person.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.

zorgs10
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Re: Treasury wants stimulus payment to dead returned

Post by zorgs10 » Wed May 06, 2020 6:20 pm

Eagle33 wrote:
Wed May 06, 2020 4:46 pm
Kiplinger article summaries the addresses of where to return decease's stimulus money and directions.

What to Do If You Get a Stimulus Check for a Dead Person
The IRS now has specific guidance on what to do if you receive a stimulus check for a deceased person.
Heh.. I read the title of the article as: "What to Do If You Get a Stimulus Check as a Dead Person". :oops:

SimonJester
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Re: Treasury wants stimulus payment to dead returned

Post by SimonJester » Wed May 06, 2020 10:57 pm

Im willing to bet they are going to make adjustments to the 2020 Tax return to reclaim these payments...
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

TheDDC
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Re: Treasury wants stimulus payment to dead returned

Post by TheDDC » Wed May 06, 2020 10:59 pm

Seasonal wrote:
Wed May 06, 2020 1:30 pm
"The Treasury Department said Wednesday that people who received a stimulus payment on behalf someone who is deceased should return the money immediately. “A payment made to someone who died before receipt of the payment should be returned to the IRS,” Treasury said in a statement."
https://www.usatoday.com/story/news/pol ... 174588002/

Experts quoted in the articles I've seen doubt the IRS has the legal authority to compel repayment from anyone and especially not from those who were alive when the CARES Act was signed into law.
This is dubious determination of the law on the part of this individual from Treasury. If you were alive when it was passed, you benefited. There is no legal authority to compel repayment for anyone who as alive as of the effective date of a law.

-TheDDC
Rules to wealth building: 90-100% VTSAX piled high and deep, 0-10% VIGAX tilt, 0% given away to banks, minimize amount given to medical-industrial complex

Seasonal
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Re: Treasury wants stimulus payment to dead returned

Post by Seasonal » Thu May 07, 2020 5:32 am

I've yet to see an analysis that anyone is obligated to return a stimulus payment. It does not appear to be supported by the text of the CARES Act.

FAQs published on irs.gov are not legal authority: "FAQs that appear on IRS.gov but that have not been published in the Bulletin are not legal authority and should not be used to sustain a position unless the items (e.g., FAQs) explicitly indicate otherwise or the IRS indicates otherwise by press release or by notice or announcement published in the Bulletin." See 4.10.7.2.4 (01-10-2018) at https://www.irs.gov/irm/part4/irm_04-010-007

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nps
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Re: Treasury wants stimulus payment to dead returned

Post by nps » Thu May 07, 2020 6:25 am

Seasonal wrote:
Wed May 06, 2020 1:30 pm
[Merged into existing discussion -- mod oldcomputerguy]

"The Treasury Department said Wednesday that people who received a stimulus payment on behalf someone who is deceased should return the money immediately. “A payment made to someone who died before receipt of the payment should be returned to the IRS,” Treasury said in a statement."
https://www.usatoday.com/story/news/pol ... 174588002/

Experts quoted in the articles I've seen doubt the IRS has the legal authority to compel repayment from anyone and especially not from those who were alive when the CARES Act was signed into law.
Also, what person receives a stimulus payment on behalf of someone else?

SimonJester
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Re: Treasury wants stimulus payment to dead returned

Post by SimonJester » Thu May 07, 2020 9:20 am

nps wrote:
Thu May 07, 2020 6:25 am
Also, what person receives a stimulus payment on behalf of someone else?
Everyone that files married filing jointly, each individual gets $1,200... Not sure how it works with paper checks, assuming they come in both filers names...
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

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cowdogman
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Re: Treasury wants stimulus payment to dead returned

Post by cowdogman » Thu May 07, 2020 9:38 am

Seasonal wrote:
Thu May 07, 2020 5:32 am
I've yet to see an analysis that anyone is obligated to return a stimulus payment. It does not appear to be supported by the text of the CARES Act.

FAQs published on irs.gov are not legal authority: "FAQs that appear on IRS.gov but that have not been published in the Bulletin are not legal authority and should not be used to sustain a position unless the items (e.g., FAQs) explicitly indicate otherwise or the IRS indicates otherwise by press release or by notice or announcement published in the Bulletin." See 4.10.7.2.4 (01-10-2018) at https://www.irs.gov/irm/part4/irm_04-010-007
I believe the legal theory behind the return would be that it was a payment made by mistake. Recovery of a payment made by mistake is an equitable remedy based, among other things, the unjust enrichment of the recipient.

That said, recovery by the IRS will be difficult, as a practical matter, to enforce against estates where there has already been a final distribution and the recipient was single at time of death. Plus the IRS would need to figure who to contact/go after for those recipients who were single at time of death (maybe thru the estate tax return?).

Where there is a surviving spouse it will be easier for the IRS.

Plus as you point out the CARES Act is not clear on this point and there could be some legal challenge, especially in respect of people who died after passage of the Act (as opposed to those who died before receiving the check/payment).

All that said, for those recipients who died in 2018 and 2019 it's pretty clear what the right thing to do is.

Seasonal
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Re: Treasury wants stimulus payment to dead returned

Post by Seasonal » Thu May 07, 2020 10:02 am

cowdogman wrote:
Thu May 07, 2020 9:38 am
I believe the legal theory behind the return would be that it was a payment made by mistake. Recovery of a payment made by mistake is an equitable remedy based, among other things, the unjust enrichment of the recipient.
That just begs the question - was the payment due under the CARES Act? If so, it was not a mistake.
cowdogman wrote:
Thu May 07, 2020 9:38 am
That said, recovery by the IRS will be difficult, as a practical matter, to enforce against estates where there has already been a final distribution and the recipient was single at time of death. Plus the IRS would need to figure who to contact/go after for those recipients who were single at time of death (maybe thru the estate tax return?).
I'd imagine any anyone with an estate large enough to be filing an estate tax return had income well in excess of the CARES Act limit.
cowdogman wrote:
Thu May 07, 2020 9:38 am
Plus as you point out the CARES Act is not clear on this point and there could be some legal challenge, especially in respect of people who died after passage of the Act (as opposed to those who died before receiving the check/payment).

All that said, for those recipients who died in 2018 and 2019 it's pretty clear what the right thing to do is.
Regarding people who died after the Act was signed, I can't see why it should matter how efficient the IRS was in disbursing funds.

For people who died earlier, the right thing to do is follow the law.

BTW, No interest shall be allowed on any overpayment.
https://www.congress.gov/bill/116th-con ... A38F83F6C6

It's hard to see how penalties could be assessed for receiving a payment absent fraud in a tax return or stealing someone else's payment. Failure of a 2018 or 2019 estate to return would not seem to be fraud.

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cowdogman
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Re: Treasury wants stimulus payment to dead returned

Post by cowdogman » Thu May 07, 2020 10:53 am

Seasonal wrote:
Thu May 07, 2020 10:02 am
cowdogman wrote:
Thu May 07, 2020 9:38 am
I believe the legal theory behind the return would be that it was a payment made by mistake. Recovery of a payment made by mistake is an equitable remedy based, among other things, the unjust enrichment of the recipient.
That just begs the question - was the payment due under the CARES Act? If so, it was not a mistake.
Keep in mind that these payments were "advance refunds" of a credit to be granted on 2020 tax returns--that is very, very clear in the CARES Act.
Seasonal wrote:
Thu May 07, 2020 10:02 am
cowdogman wrote:
Thu May 07, 2020 9:38 am
That said, recovery by the IRS will be difficult, as a practical matter, to enforce against estates where there has already been a final distribution and the recipient was single at time of death. Plus the IRS would need to figure who to contact/go after for those recipients who were single at time of death (maybe thru the estate tax return?).
I'd imagine any anyone with an estate large enough to be filing an estate tax return had income well in excess of the CARES Act limit.
Any estate with over $600 in income needs to file an estate tax return.
Seasonal wrote:
Thu May 07, 2020 10:02 am
cowdogman wrote:
Thu May 07, 2020 9:38 am
Plus as you point out the CARES Act is not clear on this point and there could be some legal challenge, especially in respect of people who died after passage of the Act (as opposed to those who died before receiving the check/payment).

All that said, for those recipients who died in 2018 and 2019 it's pretty clear what the right thing to do is.
Regarding people who died after the Act was signed, I can't see why it should matter how efficient the IRS was in disbursing funds.

For people who died earlier, the right thing to do is follow the law.

BTW, No interest shall be allowed on any overpayment.
https://www.congress.gov/bill/116th-con ... A38F83F6C6

It's hard to see how penalties could be assessed for receiving a payment absent fraud in a tax return or stealing someone else's payment. Failure of a 2018 or 2019 estate to return would not seem to be fraud.
You asked for a legal reason the money should be returned. Just trying to answer your question.

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thriftynick
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Re: Deceased received economic impact check

Post by thriftynick » Thu May 07, 2020 11:58 am

PoppyA wrote:
Sat May 02, 2020 3:49 pm
I can’t access the article because I don’t subscribe. Where should it be sent? Did the article say?
FYI, if you Google the title of a paywalled article, Google will let you read it for free:

Stimulus Checks Sent to Dead Relatives Should Be Returned, Mnuchin Says

Seasonal
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Re: Treasury wants stimulus payment to dead returned

Post by Seasonal » Thu May 07, 2020 12:21 pm

cowdogman wrote:
Thu May 07, 2020 10:53 am
Any estate with over $600 in income needs to file an estate tax return.
You're right. I was thinking of Form 706, but there's 1041.

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