On March 11, 2020, the World Health Organization declared that the COVID-19 outbreak was officially a pandemic as rates of infection rose significantly in the U.S. and across the world. On March 13, 2020, President Donald Trump declared a national emergency in the United States. Many states followed suit and issued a number of executive orders that closed down non-essential businesses, restricted travel and compelled many residents to stay in their home until the emergency passes. This led to unprecedented levels of economic decline, job loss and uncertainty about the future. Suddenly, many Americans found themselves with financial difficulties and, maybe for the first time, unable to pay their bills.
In response, Congress passed and President Trump signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act on March 27, 2020 to provide much needed support. Of all the measures contained in this monumental bill, the most well-known is the 2020 Recovery Rebates, better known as the “$1,200 stimulus checks” for nearly each adult U.S. citizen. At the direction of Congress, the Internal Revenue Service is to issue these payments as quickly as possible. These payments are being made by direct deposit to the taxpayer’s bank account (if one was already listed for the purposes of a tax refund) or by mailing paper checks to the taxpayer’s listed address.
However, the speed and haste that the IRS is directed to act has led to missed oversight and certain individuals receiving 2020 recovery rebates that would not be entitled to it otherwise. Under the CARES Act, there are three circumstances in which a stimulus payment will be issued.
- You have filed your 2019 federal tax return and you qualify for payment based on your filing status and taxable income.
- If you have not filed your 2019 federal tax return, the Internal Revenue serve may instead consider your filing status and taxable income on your 2018 tax return. 26 U.S.C. §6428(f)(5)(A). This recognizes that many taxpayers may not have filed their 2019 tax returns yet due to the COVID-19 crisis and that the filing deadline had been extended to July 15, 2020.
- An individual did not file a tax return in 2018 or 2019 but the IRS received Form SSA-1099 (Social Security Benefit Statement) and Form RRB-1099 (Social Security Equivalent Benefit Statement) with respect to the taxpayer. 26 U.S.C. §6428(f)(5)(B). This is in recognition that many senior citizens whose income is almost solely social security are not required to file a tax return.
Since the IRS may be rely on income information and prior tax returns, there is a good chance that a person that is no longer alive might receive a stimulus check. What does a personal representative, executor or surviving spouse do if they receive a 2020 recovery rebate check or deposit on behalf of the deceased?
The Internal Revenue Service has an answer: Send the money back!
On May 6, 2020, the IRS issued guidance as to the receipt of stimulus funds on behalf of a decedent:
- “A Payment made to someone who died before receipt of the Payment should be returned to the IRS…”
- “Return the entire Payment unless the Payment was made to joint filers and one spouse had not died before receipt of the Payment, in which case, you only need to return the portion of the Payment made on account of the decedent.”
If you must return the check, you should return the payment as follows:
- If you received a paper check, write “Void” in the endorsement section on the back of the check and mail it to the appropriate IRS location with a note stating that the check is being returned due to the recipient being deceased.
- If you already cashed the paper check or it was direct deposited, you must write a check or money order made out to the “United States Treasury”, write 2020EIP and the taxpayer identification number (e.g. social security number) on the check with a brief explanation (e.g. “taxpayer deceased”), and mail it to the appropriate IRS location.
If sending a paper check back, here is the appropriate IRS location to send the payment to –
- If you live in Maine, Maryland, Massachusetts, New Hampshire or Vermont, then mail to: Andover Internal Revenue Service, 310 Lowell St., Andover, MA 01810.
- If you live in Georgia, Iowa, Kansas, Kentucky or Virginia, then mail to: Atlanta Internal Revenue Service, 4800 Buford Hwy, Chamblee, GA 30341.
- If you live in Florida, Louisiana, Mississippi, Oklahoma or Texas, then mail to: Austin Internal Revenue Service, 3651 S Interregional Hwy 35, Austin, TX 78741.
- If you live in New York, then mail to: Brookhaven Internal Revenue Service, 5000 Corporate Ct., Holtsville, NY 11742.
- If you live in Alaska, Arizona, California, Colorado, Hawaii, Nevada, New Mexico, Oregon, Utah, Washington, Wisconsin or Wyoming, then mail to: Fresno Internal Revenue Service, 5045 E Butler Avenue, Fresno, CA 93888.
- If you live in Arkansas, Connecticut, Delaware, Indiana, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, Ohio or West Virginia, then mail to: Kansas City Internal Revenue Service, 333 W Pershing Rd., Kansas City, MO 64108.
- If you live in Alabama, North Carolina, North Dakota, South Carolina, South Dakota or Tennessee, then mail to: Memphis Internal Revenue Service, 5333 Getwell Rd., Memphis, TN 38118.
- If you live in District of Columbia, Idaho, Illinois, Pennsylvania or Rhode Island, then mail to: Philadelphia Internal Revenue Service, 2970 Market St., Philadelphia, PA 19104.
- If you live in a foreign country, U.S. possession or territory, or use an APO or FPO address, or file Form 2555 or 4563, or are a dual-status alien, then mail to: Austin Internal Revenue Service, 3651 S Interregional Hwy 35, Austin, TX 78741.
Failure to return the 2020 recovery rebate when required by law can result in the IRS assessing penalties and interest. As the COVID-19 situation is dynamic and continues to evolve every day, the rules regarding the stimulus payments are also subject to change. If you are confused as to your responsibilities as a personal representative or executor of a decedent, call an estate and tax lawyer who can point you in the right direction.
If you have any questions about the CARES Act or any aspect of federal taxation, then do not hesitate to contact the experienced attorneys at Kershaw, Vititoe & Jedinak PLC for assistance today.