Over a million dead people received nearly $1.4 billion in coronavirus stimulus payments. Congress’s independent watchdog reported the findings on Thursday.
Reports surfaced in April that the Internal Revenue Service disbursed some payments of $1,200 to dead people. However, Congress was unaware of the scope of the problem, according to the Washington Post.
Congress approved nearly $3 trillion in coronavirus relief spending in March and April. The GAO revealed the findings as part of a 400-page comprehensive report. The Office reports receiving the information from the Treasury Inspector General for Tax Administration.
How Did This Happen?
The GAO claims the problem was caused by the IRS rushing to disburse payments. The Cares Act called for 160.4 million stimulus payments of over $269 billion. Payments were disbursed in multiple ways. Recipients collected payments by direct deposit, prepaid debit cards, and paper checks.
A reason for the mistake is partially due to restricted access to information. The Social Security Administration has the country’s full set of death records. However, the Treasury Department and its Burea of the Fiscal Service do not have access.
The GAO offers a solution in the report. Firstly, departments ought to share information such as death records. Congress should “provide Treasury with access to the Social Security Administration’s full set of death records.” Also, Congress should “require that Treasury consistently use it, to help reduce similar types of improper payments.”
The IRS previously stated that these stimulus payments must be returned. Additionally, the GAO recommends the IRS “should consider cost-effective options” for returning payments. Currently, the IRS has not taken additional steps towards recouping payments.
Thomas A. Brandt, IRS chief risk officer, addressed the GAO report. Brandt claims the IRS is “currently considering options” on notifying ineligible recipients about return payments.
Issues with the Paycheck Protection Program
Another problematic issue the GAO outlines is the Paycheck Protection Program for small businesses. The Office cites lax controls for making the initiative vulnerable to fraud.
In past weeks, the government issued $500 billion in forgivable loans to small businesses. The program allows borrowers to self-certify their eligibility. The GAO claims this raises “the potential for fraud.”
[H/T Washington Post]