A much-publicized consequence of the push by Congress to release stimulus payments (otherwise known as Economic Impact Payments) to taxpayers quickly is the fact that many deceased individuals have received a payment.  The IRS is now requesting that those payments be returned.  A payment made to someone who died before the payment was received is to be returned to the IRS by following the instructions in Question 41 of the IRS Q&A about repayments. The IRS is directing that the entire payment be returned except in instances where the payment was made to joint filers and one spouse was still surviving when the payment was received. In that case, only the portion of the payment made on account of the decedent should be returned. The instructions for repayment from the IRS Q&A are reprinted below:

If you received a paper check and have not cashed it yet:

1. Write “Void” in the endorsement section on the back of the check.
2. Mail the voided Treasury check immediately to the appropriate IRS location listed below.
3. Don’t staple, bend, or paper clip the check.
4. Include a note stating the reason for returning the check.

If the payment was a paper check and you have cashed it, or if the payment was a direct deposit:

1. Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
2. Make the check/money order payable to “U.S. Treasury” and write “2020EIP” and the taxpayer identification number (social security number or individual taxpayer identification number) of the recipient on the check/money order.
3. Include a brief explanation of the reason for returning the payment.

Sample note to include with the check (Please include the deceased taxpayer’s name and social security number on the note):

“Enclosed is a check for the return of the Economic Impact Payment.  The taxpayer passed away prior to the receipt of the payment.  The funds are being returned pursuant to the “Economic Impact Payment Information Center” webpage on irs.gov.”

For more information, click on the link to IRS “Economic Impact Payment Information Center” FAQs:

https://www.irs.gov/coronavirus/economic-impact-payment-information-center#more

Where to send the check:

Please visit our Tax or Trusts & Estates Practice Areas to learn more about the legal services we can provide in these areas. If you have any questions or would like more information on the issues discussed in this communication, please contact any member of the Hancock Estabrook Corporate, Tax, or Trusts & Estates practice areas.

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