Nearly 1.1 million coronavirus relief payments totaling some US$1.4 billion went to dead people, a government watchdog reported Thursday. Legal and political issues hang over the misdirected taxpayer funds, the latest example of errors in massive aid being dispensed at crisis speed.
More than 130 million so-called economic impact payments were sent to taxpayers as part of the $2.4 trillion coronavirus relief package enacted in March. The Government Accountability Office, Congress’ auditing arm, cited the number of erroneous payments to deceased taxpayers in its report on the government programs.
While the government has asked survivors to return the money, it’s not clear they have to.
It also may be a politically sensitive gambit for the Treasury Department to aggressively seek to claw back the money, especially because some recipients may have died in the early months of this year from COVID-19.
When billions in aid are rushed out the door in a crisis, “these are the kinds of things that happen,” said Lisa Gilbert, executive vice president of advocacy group Public Citizen.
Gilbert acknowledged the sensitivity of the issue. But, she added, “it’s a big number, particularly at this moment when our economy is in free-fall. It’s a large amount of taxpayer money that’s not doing what it was intended to do.”
The errors occurred mainly because of a lag in reporting data on who is deceased. It’s a lapse that tax experts say is almost inevitable.
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The revelation of more than US$1 billion in public money erroneously paid out shines a light on the part of the government’s massive relief program with which most ordinary Americans are most familiar. It follows disclosures that several major restaurant chains and other publicly traded companies had received emergency loans under the US$670 billion program for the nation’s struggling small businesses.
“GAO found that more than $1 trillion in taxpayer funds have already been obligated — including more than $1 billion to deceased individuals — with little transparency into how that money is being spent,” Rep. Carolyn Maloney, D-N.Y., chair of the House Oversight and Reform Committee, said in a statement.
The IRS didn’t use death records to prevent payments to deceased individuals for the first three batches of payments because of the legal interpretation the agency was operating under, the GAO report says.
The IRS asked in May for the money back from the deceased taxpayers’ survivors. Some legal experts have said the government may not have the legal authority to require that it be returned.