Lawmakers Seek Action to Prevent Improper Impact Payments

May 7, 2020

The Honorable Steven T. Mnuchin
Secretary
Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220

The Honorable Andrew Saul
Commissioner
Social Security Administration
6401 Security Boulevard
Baltimore, MD 21235

The Honorable Charles P. Rettig
Commissioner
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, D.C. 20224

Dear Secretary Mnuchin, Commissioner Rettig, and Commissioner Saul:

We write to raise questions and express concerns with reports that deceased individuals are receiving COVID-19 related economic impact payments. In addition, we write to encourage your departments to take immediate action to prevent these improper CARES Act payments. While it is essential that our constituents receive stimulus payments quickly, these improper payments to deceased individuals represent significant government waste and a burden to constituents who mistakenly accept the payments.

As you know, the CARES Act provided for a $1,200 one-time payment per adult and a $500 payment per child for those making up to $75,000 in annual income. Of note, the Department of the Treasury and the Internal Revenue Service (IRS) have estimated that there will be 171 million rebate payments under the CARES Act. According to Treasury, as of April 29, 130 million Americans¹ have received payments from the IRS. Sadly — as has been widely reported in the news, and as many of our constituents have informed us — some of those payments have been made to people who are deceased.

Unfortunately, this is not a new issue. In fiscal year 2019, the Government Accountability Office (GAO) estimated that improper payments throughout the federal government totaled about $175 billion. Since 2003, when agencies were first directed to begin reporting improper payments, cumulative improper payment estimates across government have totaled almost $1.7 trillion. In many instances, agencies have made improper payments to the deceased. According to an Office of Personnel Management Inspector General report, agencies made a total of $601 million in improper payments from 2006 to 2010 to federal retirees later found to have already died². In total, the Administration, in its most recent budget request, estimates that payments to deceased individuals cost taxpayers over $800 million per year.³

That is why we introduced the Stopping Improper Payments to Deceased People Act, which would grant federal agencies access to the full set of the Social Security Administration (SSA's) death records, including state-reported death data. As you know, SSA maintains the most complete federal database of individuals who are reported to have died. However, only a small number of federal agencies have access to this official list. To date, those without access include Treasury's Do Not Pay working system, the government's centralized no-cost data analytics tool, which helps federal agencies detect and prevent improper payments.

Given the many reported cases of improper CARES Act economic impact payments to deceased individuals, we encourage your agencies to take immediate action to prevent these improper payments. The guidance issued by the IRS yesterday is a welcome first step and we thank you for taking that action however, additional questions remain about the steps needed to address this issue going forward. With that in mind, we request the answers to the following questions:

While we appreciate that the nature of this pandemic favors speedy delivery of payments, many of our constituents now must deal with the stress of what to do with checks sent to their deceased loved ones. We look forward to seeing your response to these questions as well as the steps your agencies are taking to prevent improper CARES Act payments to deceased individuals.

Sincerely,

Thomas R. Carper
United States Senator

Cheri Bustos
Member of Congress

John Kennedy
United States Senator

Greg Gianforte
Member of Congress

Gary C. Peters
United States Senator

Bryan Steil
Member of Congress

Kyrsten Sinema
United States Senator

Gilbert R. Cisneros, Jr.
Member of Congress

Angus S. King, Jr.
United States Senator

Jon Tester
United States Senator