The Internal Revenue Service (IRS) and the Treasury Department have collected around 70 percent of the $1.6 billion they sent to deceased Americans by accident as part of the CARES Act earlier this year, according to Federal News Network.
The money was sent in haste as the government attempted to get stimulus checks of $1,200 out to every U.S. resident. However, later reports indicated that many payments had accidentally been sent to people who had died before any of it was decided.
The error came from the initial interpretation from legal counsel that the IRS send out payments to everyone who filed taxes in 2018 and 2019, regardless of whether the person was alive still, and it took until around the third wave until the issue was realized.
The problem was compounded by the dovetailing of outdated systems and fraud, PYMNTS reported recently. Opportunistic scammers could have already made off with the payments sent to the deceased, and GIACT Co-founder and CEO Melissa Townsley-Solis said the underlying issue is that the government needs to update how it authenticates who it is making payments to.
Once it became apparent that parts of the CARES Act had been mismanaged, such as checks being sent to the deceased, a Government Accountability Office (GAO) report recommended that the Treasury and IRS be proactive in getting the money back.
More checks are expected to return once the agency continues to return to its former staffing levels, as opposed to the limited staff the branches have been operating under due to the pandemic for months. The IRS has a backlog of around 10 million pieces of mail due to the shortage, Federal News Network reported.
Dave Lebryk, fiscal assistant secretary at the Treasury Department, was optimistic that even more had already been recovered.
“That number is actually low because we know that people sent their checks back to the IRS and the IRS hasn’t opened up all its mail yet because of the backlog,” he said at a virtual conference of the Association of Government Accountants, Federal News Network reported.