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Thursday, Aug. 13, 2020

Will people who received coronavirus relief payments in error be penalized if they don’t return them?

Allegra Taylor, Gigafact Foundry
no

When the Internal Revenue Service sent out payments as part of the coronavirus relief package passed in March, some were mistakenly sent to deceased individuals and foreign workers who were ineligible.

The IRS later announced that individuals who received a payment in error should return it to their local IRS location, and posted detailed instructions on how to do so. Checks issued to deceased individuals have since been cancelled and no longer need to be returned if they weren’t cashed.

Some tax experts have questioned the legality of the IRS recalling the payments, as the original legislation makes no provisions to correct payments made in error.

The IRS website currently does not list any consequences for individuals who don’t return a payment.

This fact brief is responsive to conversations such as this one.

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