Don't Mess With Taxes

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.

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.

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.

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.

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