IRS wants money back if stimulus check went to a dead loved one

Over $9 trillion in federal aid has sent out - including tens of millions of $1,200 and $1,400 stimulus checks, relief to hospitals, airlines and small businesses.

"This has been Washington stimulus on steroids," said David Sowerby. "To put that in perspective, that's about 40 percent of the US GDP. That dwarfs any of the stimulus in 2008 great financial crisis." 

Due to the rush to get the pandemic stimulus money sent out, mistakes were made, said Sowerby managing partner, Ancora Investment management. 

Millions are still waiting for their checks, while some families are already receiving checks addressed to their deceased loved ones.

"There's going to be some spillage and that could mean people who maybe should not have received a check, people whose names are on the check that you can't cash them, because they're my deceased spouse," Sowerby said.
And the Internal Revenue Service says they want those checks back, unless the payment was made to joint filers and one spouse is still alive. Otherwise - the entire check should be returned. 

"I can only imagine whether it is online on a computer or dialing a central phone number the serenity now of how long it will take to get to a live person and a good outcome and solution," he said.

For those who received a paper check, the IRS says - write "void" on the check and mail it to the designated IRS location for your state… A note should also be included detailing why the payment is being returned.

"All you can say is patience, but I understand patience can't always be factor when it comes to putting food on the table or making a rent payment," he said.

For direct deposit - the IRS asks that people send a money order or personal check to the specified IRS location… Checks should be made out to the US treasury - all of this, adding to the confusion - and uncertainty so many Americans are already facing.

"That's unfortunately the unintended consequence of the good of doing this fast, and doing it of significance." Sowerby said.