Ineligible recipients may have received as much as $1.9 billion in stimulus funds, according to a new report.
A report from the Treasury Inspector General for Tax Administration (TIGTA) revealed that upon evaluating the 175 million advance Recovery Rebate Credit (RRC) stimulus payments distributed to 167.4 million people as of September 16, 2021, 99.48 percent were done appropriately by the IRS.
However, it also stated that the IRS made over 1.2 million economic payments totaling $1.9 billion to individuals who may have been ineligible for those payments, according to the report.
A total of $1.6 billion in stimulus payments went unclaimed by 644,705 persons who were eligible, according to the report. Of the 1.2 million potentially improper RRC payments issued, TIGTA found:
544,323 payments totaling $856 million went to people who were represented as dependents on others’ tax returns
342,173 payments worth $579 million went to non-residents and those living in U.S. territory
a total of $271 million was paid out to 191,768 people in duplicate because of a change in their filing status or that of their partner
60,824 payments of $109 million were issued because of programming problems
Payments to the deceased totaled 26,468.
The Coronavirus Aid, Relief and Economic Security (CARES) Act, which was signed into law in March 2020, includes the Recovery Rebate Credit. The American Rescue Plan Act, passed into law on March 11, 2021, authorized a third RRC of up to $1,400 per qualifying individual for the 2021 tax year.
The IRS began issuing advance RRC payments on enactment day. At that time, the IRS had issued over 175,000 advance RRC payments to 167.4 million taxpayers totaling $408 billion, of which over 10,000 were plus-up payments totaling $21 billion (payments to taxpayers who initially received their advance RRC payment on the basis of their 2019 return but who then filed their 2020 return).
The IRS has already agreed to the recommendations given by TIGTA as part of this RRC audit, and has begun fixing the payment errors made to guarantee that people eligible for payments get them or are potentially entitled to claim the RRC on their 2021 tax return.