Thank you Ira. That response is very informative. The IRS is issuing checks to people they know are deceased (thus the DECD after the name) so I suspect that the IRS initially agreed with you. Their dilemma now is that the President publicly declared that the payments shouldn't go to dead people and the Secretary of the Treasury isn't willing to tell him the law he signed says otherwise. I'm real happy I'm not a Treasury Department lawyer stuck with this problem.
FWIW, in my case they made a direct deposit to the estate's account, the same account where they deposited the refund from the final tax return.
I'm still going to wait and see what happens. No hurry.
Where is the anti-clawback provision?
So the eligible individual also cannot claim the credit on a 1040 return, because he is dead and cannot file a 1040 return.
Based on the guidance provided on other aspect of the CARES Act which is in conflict with the statute, and in conflict with previously and recently issued guidance, I don't think we can assume the IRS actually thought about what they were doing. Some flunky pressed a button on the big IRS computer since they were told to get the checks out ASAP.
Then laypeople like me thought that "dead people" and "estate" were the same thing. For tax purposes, they are not. But until people understand this, mass confusion will reign.
Worse, no one in government said, "Congress and the President wanted to get money out to people as quickly as possible. Using tax returns to do this made the most sense. The amount of the stimulus payment necessarily had to depend on AGI. People who died in 2019 had AGI. The deceased's beneficiaries ultimately get the stimulus payment. This was not a mistake. This is a good thing."
Nor did I see any of the financial-specialized popular media cite specifically cite section 5428 (f) (1). Nina Olson obviously was referring to it. I am sure popular media found the law too dense to be worthy of publication. But as CPA and USTCP David Fogel demonstrated, the explanation for why estates are receiving checks on behalf of dead people is just a few short paragraphs long. (Granted most in this country will not understand even the few short paragraphs. Congress people, the President, and the Treasury Secretary certainly should.)
Then NPR and friends seized on these statements by the President and Treasury Secretary. The media flooded the IRS with questions about when 'guidance' would appear. Panic in government ensued. My theory: The Treasury Secretary or higher ordered the IRS to inform people that, "A Payment made to someone who died before receipt of the Payment should be returned to the IRS..., " adding that the check should be returned "immediately."
I think not one person at the IRS believed this "information" (given in Q10 and Q41 at
I think fraud and corruption likely played an enormous role here.
Per media reports, a lot of folks are going to return these stimulus checks made out to dead people. This government is defrauding them of money that rightfully belongs to the estates of the deceased. If the world and this country were not in the midst of a national crisis with no clear end in sight; then I would predict that a Congressional investigation would take place.
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