Stimulus Update: $1.9 Billion May Have Been Disbursed to Ineligible People — See Why
A report from the Treasury Inspector General for Tax Administration (TIGTA) claimed that upon reviewing the 175 million advance Recovery Rebate Credit (RRC) stimulus payments issued to 167.4 million individuals as of September 16, 2021, 99.48% were done correctly by the IRS. However, it also stated that the IRS issued more than 1.2 million economic payments, totaling a whopping $1.9 billion, to potentially ineligible people.
Additionally, the report found that up to 644,705 eligible people did not receive stimulus payments, accruing $1.6 billion. Of the 1.2 million potentially incorrect RRC payments issued, TIGTA found:
- 544,323 payments worth $856 million went to people who were claimed as dependents on others’ tax returns
- 342,173 payments worth $579 million went to non-residents and people living in U.S. territories
- 191,768 individuals received duplicate payments worth $271 million due to changes in filing status or their partner
- 60,824 payments worth $109 million were issued because of programming errors
- 26,468 payments were made to dead people
The Recovery Rebate Credit is part of the Coronavirus Aid, Relief and Economic Security (CARES) Act that was signed into law in March of 2020. The American Rescue Plan Act, signed into law on March 11, 2021, created a third RRC of up to $1,400 per eligible individual for the 2021 tax year.
The IRS began issuing the advance RRC payments on enactment day. As of September 16, 2021, the IRS had issued more than 175 million advance RRC payments to 167.4 million individuals totaling $408 billion, more than 10 million of which were plus-up payments totaling $21 billion (“plus-up” payments are payments to individuals whose advance payment was initially based on a 2019 return and who subsequently filed their 2020 return).
The IRS has already agreed with the recommendations made by TIGTA as part of this RRC audit, and has begun repairing the payment errors made to ensure that those eligible for payments get them or are potentially eligible to claim the RRC on their 2021 tax return.
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