IRS Says Its Own Error Sent $1,200 Stimulus Checks To Non-Americans Overseas
BY SACHA PFEIFFER
The IRS now acknowledges that its own error caused some citizens of other countries to mistakenly receive $1,200 coronavirus relief payments — and that the mistake is likely to happen again if more stimulus money goes out.
When reports of the mistake first surfaced, the U.S government placed the blame on those non-Americans, saying that many noncitizens erroneously received stimulus checks because they had filed incorrect tax returns that made them appear to be American.
But many non-Americans who received stimulus money do not file U.S. tax returns. One of them is Susanne Wigforss, a 78-year-old Swedish citizen who lives in Stockholm.
Wigforss was surprised in July to get a $1,200 check in the mail from the U.S. Treasury. It was followed by a letter from the White House signed by President Trump, addressed to “My Fellow American” and informing her that “your economic impact payment has arrived.”
“I thought, ‘I can’t believe it,’ ” Wigforss recalled. “They’re sending it to me. Why? I mean, it’s crazy, isn’t it?”
Only U.S. citizens and U.S. “resident aliens” are eligible for stimulus money — “resident alien” is a federal tax classification, and to qualify an individual needs a green card or must have been in the U.S. for a certain amount of time — and Wigforss is neither.
Asked about this by NPR, the IRS acknowledged it mistakenly sent checks to some noncitizens who receive Social Security and other federal benefits — such as Wigforss, who receives a small Social Security payment from having worked in California for several years.
“This is so wrong,” Wigforss said, “because I saw that a number of people were being evicted every month in Chicago, for instance, and I thought one of those families would have needed this stimulus check. Why should a Swedish citizen living abroad receive $1,200?”
“There’s no way I’m going to cash this money — it doesn’t belong to me,” she added. “But how much money is bleeding out from the Treasury Department because of these [misdirected] stimulus checks, I wonder?”
The U.S. government cannot answer that question. The Treasury Inspector General for Tax Administration did find that, as of late May, $34 million in stimulus money had gone to people who filed a tax return with a foreign address.
But that includes eligible people, such as U.S. citizens living abroad, and does not include ineligible foreign citizens who received a check at a U.S. address. For example, NPR interviewed a citizen of the Dominican Republic who was not eligible yet received a $1,200 economic impact payment at his former address in Massachusetts. That $34 million also does not include people, such as Wigforss, who received a check but did not file a U.S. tax return.
Since Congress passed its coronavirus relief package in a hurry in March, the U.S. government has put no mechanisms in place to prevent these mistakes from happening again. As a result, if a new relief plan with more stimulus payments passes in the final weeks of the Trump administration or during the Biden administration, some of that money is likely to mistakenly end up in mailboxes overseas again.
U.S. Treasury officials said they are “continuing to assess the accuracy of the economic impact payments … and the recovery efforts for any erroneous payments.” In the meantime, they told NPR, the IRS is “relying on individuals to voluntarily return these payments.”
“I think the poor folks in the IRS don’t have the bandwidth to go chasing this,” said Enda Kelleher, a vice president at Sprintax, which does U.S. tax preparation for nonresidents, “but it would be great if they did, because I believe that there’s millions of dollars that have gone to people that weren’t entitled to it, or they’re certainly not the intended recipients.”
Kelleher said Sprintax has clients from about 150 countries who mistakenly received stimulus checks, mostly commonly in India, China, South Korea, Vietnam and the United Kingdom, as well as numerous nations in Latin America.
“It’s awful when we hear of millions of dollars going into the wrong hands,” he added, “but it was probably within a somewhat acceptable threshold of error or margin of error” because Congress opted for speed over accuracy when it flooded the U.S. economy with money last spring.
Many non-Americans who erroneously received a check are trying to return it because they worry it will jeopardize their visa or immigration status, “but there’s equally thousands that are saying, ‘Well, if they were silly enough to make this mistake, it’s their mistake and I’m not going to give it back until they ask for it,’ ” Kelleher said.
Van Shockley falls in that category. He’s 74 and was born in Pennsylvania, but he moved to Australia after becoming disillusioned with U.S. politics in the 1960s.
“I had always been depressed when JFK was killed,” he explained. “I just couldn’t get over that, so I started looking for someplace else [to] start all over.”
Shockley gave up his U.S. citizenship and has now been an Australian citizen for about a half-century. His last trip to the U.S. was 40 years ago. But he, too, received stimulus money, even though he is not eligible for it and does not file a U.S. tax return.
“That was the weirdest thing ever,” he recalled. “I checked the mail and I pulled out a check. It had a Federal Reserve/Treasury thingamajig on it with the eagle and all that. It’s made out to me. I thought: ‘What’s it from — America? What the hell’s going on here? Why am I getting a check from the government?’ ”
Shockley suspects he mistakenly got a check because he receives Social Security from having worked in the U.S. before moving overseas.
“At first, I thought it was a joke,” he said, “and then I went down to the bank and I said, ‘Do you have some way of verifying that this is legal?’ And the girl came back after five minutes and said, ‘It’s legal. You got the money.’ ”
“I didn’t ask for the money. I didn’t expect any money,” Shockley added. “But as soon as I got it, I stuck it in the bank. You ain’t getting it back!”
He attributes the mistake to U.S. government incompetence.
“Oh, complete stupidity. They’re just not doing their job properly,” Shockley said. “But I’m not complaining totally because I was happy with the money!”