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U.S. Treasury sends stimulus checks to more than a million dead people, report finds

The GAO says fraud is also a huge issue with the relief checks

Photo (c) imagedepotpro - Getty Images
It’s probably not something anyone at the White House wants brought up in a press briefing, but a new report from the government’s top watchdog, the Government Accounting Office (GAO), says the U.S. Treasury sent COVID-19 stimulus checks totaling nearly $1.4 billion to more than a million dead people.

To its credit, the GAO was upfront about the gaffe. In preparing its first CARES report to Congress on the government’s response to the COVID-19 pandemic, the GAO said it had received that information from the Treasury Inspector General for Tax Administration as part of an April 30 accounting.

All told, the IRS and Treasury made 160.4 million payments worth $269.3 billion to taxpayers as of May 31. The checks that went to the deceased were made because of the scramble by officials to get out all the stimulus checks.

Can you send that check back, please?

According to the Washington Post’s investigation, the problem stems partly from the fact that the Treasury Department and its Bureau of the Fiscal Service do not have access to the Social Security Administration’s complete set of death records.

The GAO suggested to the IRS that it “consider cost-effective options for notifying ineligible recipients how to return payments,” and the IRS said it would be happy to. 

However, “happy to” and “did” are two different things. While the IRS had posted a notice on its website that stimulus checks made out to deceased or incarcerated people should be sent back, the IRS has no plan in place to take steps toward recouping those missent payments, the GAO said.

Instances of fraud run rampant

In its report, the GAO didn’t hold back on what it found. The group essentially unearthed something going wrong in about every square inch of Washington, D.C.

For one thing, the GAO found many instances of fraud. Counting up the number of times the group used the word “fraud” in its report, ConsumerAffairs found an astonishing 196 times it tied fraud to COVID-19 -- medicare fraud, tax fraud, you name it. 

One concern the GAO expressed was that the Small Business Administration (SBA) did not provide details on how it plans to identify and respond to risks in PPP to address potential fraud, including in loans of $2 million or less.

Another big, fraudulent elephant in the GAO’s room is the fact that the Department of Labor has yet to provide information to state unemployment agencies about the risk of improper payments being made to workers who may be receiving unemployment benefits and PPP funds. 

“Confusion about this issue increases the risk of improper payments to beneficiaries and misuse of limited funds,” the GAO commented.

Department of Labor officials neither “agreed or disagreed” with the GAO’s recommendation, but officials said they reached out to the SBA for its help in informing its guidance and expects to release that information to state unemployment insurance agencies sometime in the next 30 days.

Outside of those two fraud issues, one consumer concern the GAO raised is the lack of a national aviation-preparedness plan for communicable disease outbreaks. The Department of Transportation said it agreed, but it passed the buck to the Department of Health and Human Services (HHS) and the Department of Homeland Security (DHS). 

“[The HHS and DHS are] responsible for communicable disease response and preparedness planning, respectively, (and) should lead any efforts to address planning for communicable disease outbreaks, including for transportation,” the DOT said.

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