IRS, stimulus payments, error, guidelines, Stimulus checks, non-resident aliens, detainees, deceased taxpayers, money, return

The IRS issues instructions on how to return an incorrectly received stimulus payment. By way of background, the IRS is issuing checks/direct deposits to most US taxpayers who have an SSN, if your income was less than $75,000, you would get $1,200 and another $500 per dependent.
Interestingly enough, US citizens living overseas are eligible.

You can find more details here.

As the IRS focused on relative speed, they have already sent millions of stimulus payments in error. The IRS confirmed it on May 6, along with guidelines to return it. Mistakenly sent stimulus checks have been issued to, among others, non-resident aliens, detainees, and deceased taxpayers. The IRS is now asking these recipients, or their family members, to return the money.

If one of these situations might apply to you, first check the following:
  1. Your income in 2020 exceeds the income threshold – no mistake. No need to pay it back; The CARE act based taxpayers’ eligibility on their 2018 or 2019 income level.
  2. You renounced US citizenship or surrendered a green card in 2019. The IRS issued a stimulus payment based on the information on your 2018 tax return – this payment is a mistake. You have to return it.
  3. The check was issued in the name of a deceased person – this payment is a mistake. It cannot be cashed anyway as it would constitute fraud. The IRS asks relatives to return the check.
  4. A payment was made to a married couple where one of the spouses died. The payment amount is higher than it should be for a surviving spouse. The IRS requests that you return the check.
  5. A married couple has divorced or separated. A spouse has received a check (or a direct deposit to a bank account). It does not need to returned to the IRS. However, it would be fair and ethically correct to approach the former spouse and offer their share. Otherwise, the ex-spouse will receive nothing.

The IRS has not stated that any specific penalty would apply for failing to follow these guidelines, simply that you should return the money immediately.

How to return a stimulus payment

If the payment was a paper check:

  1. Write “Void” in the endorsement section on the back of the check.
  2. Mail the voided Treasury check immediately to the appropriate IRS location listed below.
  3. Don’t staple, bend, or paper clip the check.
  4. Include a note stating the reason for returning the check.

If the payment was a paper check and you have cashed it, or if the payment was a direct deposit:

  1. Submit a personal check, money order, etc., immediately to the appropriate IRS location.
  2. Write on the check/money order made payable to “U.S. Treasury” and write 2020EIP, and the taxpayer identification number (social security number,  or individual taxpayer identification number) of the recipient of the check.
  3. Include a brief explanation of the reason for returning the EIP.

If you live overseas, you would send it to:
Austin Internal Revenue Service
3651 S Interregional Hwy 35
Austin, TX 78741

Otherwise, you would go to that link for the appropriate address.

FREE U.S. tax guide for Americans abroad

The only e-book about U.S. international taxation, which you need to read as U.S. expat:

1. Foreign Tax Credit vs. Foreign Earned Income Exclusion

2. What is the danger of holding a Controlled Foreign Corporation?

3. Why more and more people are renouncing U.S. citizenship?

Thanks for requesting our free tax guide! It will be delivered to your inbox shortly.