On May 6th, the IRS updated its FAQs related to the Economic Impact Payments, found at the Economic Impact Payment Information Center, to clarify that deceased individuals do not qualify for the payments. The FAQs also indicate that individuals who are incarcerated do not qualify for the payment, a limitation that is not found in the text of the CARES Act. The IRS further clarified that individuals who are nonresident aliens in 2020 do not qualify, even if they are resident aliens during 2019.
It should be noted that FAQs that are not officially published and are only available on the IRS website, are not a legal authority and can be changed at any time. Many times these FAQs are not reviewed and are not the official position of the IRS. As such, this information should be used as a guide only to provide insight into the position that the IRS may decide to take, and should generally not be officially relied on by taxpayers.
With that said, the IRS is encouraging individuals who received payments that should not have been made to return the payments. How the payment is to be returned depends on how the payment was received:
Received by Check and Not Cashed: If the check has not been cashed yet, individuals should write “VOID” in the endorsement section of the check and then mail it back to the IRS, along with a note indicating the reason for returning the check. The mailing address can be found on the FAQ page, linked above.
Received by Direct Deposit or Check Cashed: If the payment was received directly into an individual’s bank account, or the check received was cashed, then the IRS is requesting individuals to write a personal check or money order made payable to “U.S. Treasury” and mail it to the IRS. Individuals should write “2020EIP” and the recipient’s social security number or tax identification number on the face of the check and should include a note indicating the reason for the payment. Again, the mailing address can be found on the FAQ page, linked above.
The FAQs do not address how the IRS plans to enforce repayment of the Economic Impact Payments, or how they will recover payments if the payments have already been spent. Please contact your HBK advisor if you would like to discuss what this guidance means to your specific situation. As always, we will continue to keep you informed on any new developments