When it came to quickly distributing stimulus checks on a massive scale, the Internal Revenue Service resolved the errors in the third round, according to a recent watchdog from the Treasury – at least for the most part.
The IRS correctly counted the amount for 166.6 million people with an accuracy rate of 99.48%, the IRS (TIGTA) said Thursday based on its review of 175 million third-round $ 1,400 stimulus check payments to more than 167 million people.
Still, the IRS sent more than 1.2 million possibly erroneous payments at a cost of $ 1.9 billion, the watchdog said. Meanwhile, nearly 645,000 potentially eligible individuals can still wait for stimulus payments in the third round, which could total up to $ 1.6 billion.
The erroneous money for stimulus checks included 9,592 payments to deceased persons where the IRS had a death date before payment, TIGTA investigators said. (The U.S. rescue plan, which approved the third wave of inspections, said people who died before January 1, 2021, were not eligible for payment.) These payments amounted to between $ 13 million and $ 14 million, according to TIGTA investigators said.
Programming errors resulted in nearly 45,000 payments to deceased relatives, costing $ 64 million, they noted.
Wrong payments, running into millions and billions, are big numbers, to be sure – but they are small compared to the number of potentially erroneous payments that went out in the spring and summer of 2020, in the early stages of the pandemic.
For example, the IRS sent out $ 4.45 million of potentially erroneous stimulus check payments during the first round at a cost of $ 5.5 billion, TIGTA investigators noted in March last year. It included nearly $ 2.17 million in payments for nearly $ 3.5 billion to people who had died, according to IRS records. watchdog staff wrote.
Some of the second round of $ 600 stimulus checks, which began rolling out in late December 2020, had their own problems. An IRS data breach created nearly 13 million second-round payments to temporary bank accounts, according to a TIGTA review May last year.
These temporary bank accounts set up by taxpayers are the first destination for the refund before the rest – minus the company’s fees – is sent to the customer’s bank account. With the money in the temporary accounts, the money stayed out of people’s hands. Some payments were redirected to the correct account, but in many cases the IRS had to reissue payments.
“With each check, the IRS rose to meet the challenge of identifying eligible individuals and issuing payments as quickly as possible; however, it is important to note that the tax system is primarily a collection system and not a payment program. ‘”
The latest report comes as the IRS tries to clear a backlog of last year’s unprocessed returns and correspondence while also working through the tax returns filed this year. One of the reasons the agency got behind the eight-ball was the crushing work of getting three rounds of stimulus checks out, says IRS Commissioner Charles Rettig have said.
After the third round of checks, the IRS also distributed $ 93 billion advance payment of child tax deductions to eligible families from July to December.
The IRS did not immediately respond to a request for comment, but the agency did respond to TIGTA findings in the report itself.
When it came to checks for dead persons, the IRS noted that the information on the date of death had not been confirmed at the time it issued the payment. The agency further issued about 9,000 payments to dead people, but the IRS got the date of death after the money ran out.
The IRS was “satisfied” with 99.48% accuracy when it came to the correct amount of payments, wrote Ken Corbin, the IRS’s head of taxpayer experience and commissioner of payroll and investment departments.
In total, the three rounds were more than $ 800 billion “to hundreds of millions of deserving and needy Americans during the pandemic,” he wrote.
With each check, Corbin later added, “the IRS stood up to meet the challenge of identifying eligible individuals and issuing payments as quickly as possible; however, it is important to note that the tax system is primarily a collection system and not a payment program.”
The third round of stimulus checks can now be a distant memory for many households as inflation and high gas prices push budgets and spur consumer pessimism these days. But for some families, the $ 1,400 checks make a welcome difference this tax season.
For example, if a child were born in 2021, the IRS would not yet have known about the infant in the household who is entitled to a payment of $ 1,400. The recovery rebate credit on this year’s tax return is the time when parents can receive the payment, said the IRS.
The average size of tax refund has increased significantly so far compared to the same point last year. On March 11, the average reimbursement was $ 3,352, which is 13% higher than a year ago, It shows the statistics of the tax authorities.
Delayed stimulus-check tax deduction claims and the improved child tax deduction payments are two potential explanations for the increase, say observers.