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IRS requests, not demands, return of improperly-issued COVID payments. Here's how to do that

Return to sender postal stamp

The Internal Revenue Service announced in late May that it had sent out more than 152 COVID-19 economic relief payments totaling almost $258 billion

Some coronavirus cash, however, went to folks that weren't supposed to get it. This includes relief payments to deceased taxpayers, some foreign-based workers and incarcerated individuals, as well as those married to someone who is in prison.

Request, not demand: The IRS wants these folks to send back their stimulus money, although there's no indication, either legislatively or regulatorily, that the agency has any authority to require it.

There's also the question of how it would enforce its request for stimulus returns.

But for those who do decide to send back an improperly distributed economic impact payment, or EIP, the IRS offers these tips.

Mail back only: The first thing to note is that while the IRS has long encouraged electronic taxpayer transactions, it's not accepting returned COVID money this way.

You must return the mistakenly sent payment, regardless of how you got it, via the U.S. Postal Service.

The IRS office to which you send back the money depends on where you live. The mailing addresses to use is shown in the table below.

 
If you live in these states, etc. Then mail COVID relief amount
to this IRS address
Maine, Maryland, Massachusetts,
New Hampshire, Vermont
Andover Internal Revenue Service
310 Lowell Street
Andover, MA 01810
Georgia, Iowa, Kansas,
Kentucky, Virginia
Atlanta Internal Revenue Service
4800 Buford Highway
Chamblee, GA 30341
Florida, Louisiana, Mississippi,
Oklahoma, Texas
Austin Internal Revenue Service
3651 S. Interregional Highway 35
Austin, TX 78741
New York Brookhaven Internal Revenue Service
1040 Waverly Avenue  
Holtsville, NY 11742
Alaska, Arizona, California, Colorado,
Hawaii, Nevada, New Mexico, Oregon,
Utah, Washington, Wisconsin, Wyoming
Fresno Internal Revenue Service
5045 E. Butler Avenue
Fresno, CA 93888
Arkansas, Connecticut, Delaware, Indiana, Michigan, Minnesota, Missouri, Montana,
Nebraska, New Jersey, Ohio, West Virginia
Kansas City Internal Revenue Service
333 W. Pershing Road
Kansas City, MO 64108
Alabama, North Carolina, North Dakota,
South Carolina, South Dakota, Tennessee
Memphis Internal Revenue Service
5333 Getwell Road
Memphis, TN 38118
District of Columbia, Idaho, Illinois,
Pennsylvania, Rhode Island
Philadelphia Internal Revenue Service
2970 Market Street
Philadelphia, PA 19104
A foreign country
or U.S. possession or territory
or use an APO or FPO address
or file Form 2555 or 4563
or are a dual-status alien
Austin Internal Revenue Service
3651 S. Interregional Highway 35
Austin, TX 78741

 

Uncashed checks easiest: The easiest return of an incorrect COVID-19 economic relief payment is where you a paper U.S. Treasury check and did not cash or deposit it.

Trump signature on COVID relief payment check closeup2

In this case, write "Void" in the endorsement section on the back of the Treasury check. Then mail the voided check to the appropriate IRS locations shown in the above table.

The IRS says to include a brief explanation of why you are returning the check. Don't, however, staple, bend or paper clip the check to that explanation or anything else (a personal note to Treasury Secretary Steven Mnuchin, perhaps?) you might include in the return mailing.

Making up the money yourself: If you got a check and cashed or deposited it or you got your coronavirus stimulus amount via direct deposit, you need to send that amount to the IRS from your own funds.

That means writing a personal check for the COVID-19 payment or buying a money order for the amount and mailing it, again using the table info, to the appropriate IRS location for your state.

Make the check or money order payable to U.S. Treasury and write 2020 EIP on the check or MO. In addition, says the IRS, also note on the check or MO the taxpayer identification number, Social Security number or individual taxpayer identification number of the person whose name is on the check or account.

Again, also include a brief explanation of why they are returning the economic impact payment.

Returning a deceased recipient's payment: An IRS-issued economic impact payment to someone who died before they received it also should be returned to the tax agency.

The IRS says to return the entire payment unless it was made to joint filers and one spouse is still living. In that case, return half the payment, but not more than $1,200.

If you got a coronavirus relief check but can't deposit it because it was issued to both spouses and one spouse has died, the surviving husband or wife should return the original check. The IRS says that once it receives and processes the returned payment, it will issue a revised COVID-19 economic impact payment to the surviving spouse.

Returning a debit card: In some cases, taxpayers got their economic impact payment via a debit card.

If you want to return that card and not have the payment re-issued — and please, let me know why you would do that — you can return that payment method, too.

Covid-19 prepaid debit card front and back images

The IRS says to mail the card along with a brief explanation stating you don't want the payment and do not want the payment re-issued to:

Money Network Cardholder Services
5565 Glenridge Connector N.E.
Mail Stop GH-52
Atlanta, GA 30342

Should, not must: Finally, there's the matter of whether the IRS can demand return of the incorrect payments.

While the tax agency has detailed how to return incorrect or unwanted economic impact payments, the IRS has not issued any statement of consequences you might face for not doing so.

The IRS guidance simply says taxpayers "should" return any improperly issued coronavirus money "immediately." There is no mandate to do so and the Coronavirus Aid, Relief and Economic Security (CARES) Act that created the payments doesn't have any provision to claw back the stimulus money once it's been distributed.

So you do you as far as your COVID-19 economic relief payment. If you are sending back the money, I hope these instructions help.

But if you are a financially strapped, laid off taxpayer who already spent the COVID-19 relief money on groceries and utilities, then the IRS probably is out of luck in its return request.

 

Coronavirus Caveat & More Information
In 2020, we're all dealing with extraordinary circumstances,
both in our daily lives and when it comes to our taxes.
The COVID-19 pandemic and efforts to reduce its transmission
and protect ourselves and our families means that,
for the most part, we're focusing on just getting through these trying days.

But life as we knew it before the coronavirus will return,
along with our mundane tax matters.
Here's hoping that happens soon!
In the meantime, you can find more on the virus and its effects on our taxes
by clicking Coronavirus (COVID-19) and Taxes.

 

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Comments

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Kay Bell

Good point, Carol. Although I put it in the headline, you're right. That needs to be at least mentioned higher up in the post. So I did. Thanks for the editing! Kay

Carol A. Pettit, EA

I wish the essence of the last three paragraphs had come at the beginning of the post rather than at the end. Despite the headline, the bulk of the post leans heavily toward repayment being mandatory.

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