Stimulus checks issued to deceased taxpayers needs to be returned to the federal government, according to Treasury Secretary Steven Mnuchin. The Internal Revenue Service has already sent out nearly 90 million checks in a matter of weeks and one of the emerging issues is that some of the recipients are deceased. This is happening because the IRS is sending out checks to people who filed taxes in 2018 or 2019. The problem is some of the people on those tax returns have since died.
It is not clear that you are under any legal obligation to return the money sent to a person who died in 2018 or 2019, the tax years used by the IRS to determine eligibility for a stimulus payment. The CARES Act, which authorized the payments, had no language forbidding distributions to the deceased, nor did it stipulate ways to claw back money given to the dead.
In the absence of official guidance, the safest course of action would be to hold on to the money sent to a deceased taxpayer or return the check to the IRS until the IRS resolves the issue once and for all. For taxpayers located in North Carolina, mail the returned check to:
Memphis Refund Inquiry Unit
5333 Getwell Road
Mail Stop 8422
Memphis, TN 38118
For other states, the IRS mailing addresses can be found here (Q41): https://www.irs.gov/coronavirus/economic-impact-payment-information-center#more.
Should you choose to return the check to the IRS, a note should be included advising the IRS that the taxpayer is deceased and write “void” in the endorsement section on the back of the check. Be sure to mail the check with tracking so you can confirm receipt by the IRS. Do not send with a signature required though since there is no one at the IRS to sign and it will be returned to the sender.
If the stimulus payment was directly deposited into a bank account, the best course of action to take is to either keep the money in the bank account or submit a personal check payable to U.S. Treasury, write 2020EIP and the taxpayer identification number in the memo section of the check and a brief explanation of the reason for returning the EIP to the appropriate IRS location until the IRS or Treasury provides guidance on how to proceed.