The IRS Is Going to War to Get Stimulus Checks Accidently Sent Overseas

The IRS Is Going to War to Get Stimulus Checks Accidently Sent Overseas

The government’s quest to recover mistakenly sent stimulus checks from overseas has gotten complicated. 

Efforts by the IRS to retrieve some stimulus checks from the recent stimulus packages that were sent to the wrong people overseas have led to “legal mayhem overseas,” according to a new report.

According to a report from NPR, the stimulus packages led to more than a billion dollars being sent to people who are either no longer living or are living in other countries and not eligible for the money.

Now, the IRS is trying to get the money back from those countries. But it hasn’t been smooth.

According to NPR, the Bank of Guam has been sued by dozens of customers, who they say have “illegally seized stimulus deposits totaling more than $400,000.”

In the case of Guam and other nearby nations, the Treasury Department wrote a letter to the Bank of Guam, informing them that it needs their help in recovering payments that they said went out in error. But that appears to have ensnared some payments that were proper, such as one that went to a lawyer who lives in Micronesia but still has U.S. citizenship and pays U.S. taxes.

In the case of one bank customer, Micronesian police officers even came to his workplace to question him about the money.

"Hats off to the Bank of Guam if they can suddenly retrain all of their team to be nonresident tax experts, but I don't think that that is the business that they're in," Enda Kelleher, a vice president at Sprintax, told NPR. "And I don't think it would be appropriate for them to be going through individuals' tax returns and establishing residency and establishing treaty eligibility and establishing eligibility for the stimulus check.”

The Boston Herald reported earlier this month that over 1.2 million stimulus checks from the CARES Act, from the spring of 2020, had not been cashed. The newspaper defined those numbers as “the number of people who either refused to accept, paid back or not cashed the stimulus checks they received from the IRS as a result of the CARES Act.”

Some of those people are believed to have died. However, while the 1.2 million figure sounds high, it’s actually a very small fraction of the roughly 130 million checks that were sent out as part of the CARES Act.

There are indications that the government is nearly finished distributing the $1,400 stimulus checks that were mandated for most Americans as part of the American Rescue Plan Act. The IRS is no longer sending out weekly updates about how many checks have gone out, but as of two weeks ago, it appeared that very little money remained to be distributed.

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist, and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Image: Reuters