The IRS now says its own error caused thousands of non-Americans living overseas to mistakenly receive $1,200 stimulus checks — and the mistake could happen again if more stimulus money goes out.

Transcript

RACHEL MARTIN, HOST:

All right - an update to an NPR investigation now. Earlier this year, our team of reporters discovered that stimulus money from the first coronavirus relief package had been mistakenly sent to citizens of other countries. The U.S. government previously blamed the recipients for that error. But as Sacha Pfeiffer from our NPR investigations team reports, the IRS now says those non-Americans were not always at fault and the mistake is likely to happen again if more stimulus checks go out.

SACHA PFEIFFER, BYLINE: Susanne Wigforss is a 78-year-old citizen of Sweden who lives in the country's capital, Stockholm. And over the summer, she was surprised to get a check in the mail from the United States Treasury, followed by a letter signed by President Donald J. Trump.

SUSANNE WIGFORSS: And it says the White House, Washington, July 31 - your economic impact payment has arrived. My fellow American...

PFEIFFER: It was a stimulus check for $1,200.

WIGFORSS: And I thought, I can't believe it. They're sending it to me. Why? (Laughter). I mean, it's crazy, isn't it?

PFEIFFER: It's crazy, she says, because she is not entitled to that money. The only people eligible for stimulus checks are U.S. citizens and individuals that, for tax purposes, the IRS calls resident aliens. Susanne Wigforss is neither of those. Now, previously, the U.S. government said the reason many noncitizens mistakenly receive checks is they filed incorrect tax returns that made them appear to be American. But Wigforss does not file a U.S. tax return. Asked about this by NPR, the IRS now acknowledges that some non-Americans erroneously received stimulus money through no fault of their own.

WIGFORSS: I'm just upset. I love America, and this is so wrong 'cause I saw that a number of people were being evicted every month in Chicago, for instance, and I thought, one of those families would have needed this stimulus check. Why should a Swedish citizen living abroad receive $1,200?

PFEIFFER: The IRS now says it mistakenly sent checks to some noncitizens who receive Social Security and other federal benefits - people like Susanne Wigforss. She receives a small Social Security payment from having worked in California for several years, and she believes that's why the IRS erroneously sent her a stimulus check.

WIGFORSS: I'm not going to cash it. I'm just going to leave it here. There's no way I'm going to cash this money. It doesn't belong to me.

PFEIFFER: Since Congress passed its coronavirus relief package in March, the U.S. government has put no mechanisms in place to prevent these mistakes from happening again. That means if a new relief plan passes in the final weeks of the Trump administration or during the Biden administration and if it includes more stimulus payments, some of that money is again likely to mistakenly end up in mailboxes overseas. Wigforss is even likely to get another check.

WIGFORSS: How much money is bleeding out from the Treasury Department because of these stimulus checks? - I wonder.

PFEIFFER: The U.S. government cannot answer that question. The Treasury did find that as of late May, $34 million in stimulus had gone to people who filed a tax return with a foreign address. But that includes eligible people, like U.S. citizens living abroad. And it does not include citizens of other countries who received a check at a U.S. address. For example, NPR interviewed a citizen of the Dominican Republic who was not eligible yet got a check at his former address in Massachusetts. That $34 million also does not include people like Wigforss who got a check but don't file a U.S. tax return at all.

ENDA KELLEHER: I think the poor folks in the IRS don't have the bandwidth to go chasing this.

PFEIFFER: Enda Kelleher is a vice president at Sprintax, which does U.S. tax preparation for nonresidents.

KELLEHER: It'd be great if they did because I believe that there's millions of dollars that has gone to people that weren't entitled to it or that certainly are not the intended recipient.

PFEIFFER: Sprintax has clients from about 150 countries who mistakenly received stimulus checks. Kelleher said the most common were India, China, South Korea, Vietnam and the United Kingdom, as well as numerous nations in Latin America.

KELLEHER: It's awful when we hear of millions of dollars going into the wrong hands, but it was probably within a somewhat acceptable threshold of error or margin of error.

PFEIFFER: Acceptable, he said, because Congress opted for speed over accuracy when it flooded the U.S. economy with money last spring. Many non-Americans who received a check in error are now trying to return it because they worry it will jeopardize their visa or immigration status.

KELLEHER: But there's equally thousands that are saying, well, if they were silly enough to make this mistake, it's their mistake, and I'm not going to give it back until they ask for it.

PFEIFFER: Van Shockley falls in that category. He's 74 years old and was born in Pennsylvania, but he moved to Australia after becoming disillusioned with U.S. politics in the 1960s.

VAN SHOCKLEY: I had always been depressed when JFK was killed. I just couldn't get over that. So I started looking for someplace else, start all over.

PFEIFFER: So he gave up his U.S. citizenship and has now been an Australian citizen for about a half century. His last trip to the U.S. was 40 years ago. But he, too, received stimulus money, even though he's not eligible for it and does not file a U.S. tax return.

SHOCKLEY: That was the weirdest thing ever. I checked the mail, and I pulled out a check - Federal Reserve Treasury thingamajig with the eagle and that. It's made out to me. What's this from America? What the hell's going on here? Why am I getting a check from the government?

PFEIFFER: Just like Susanne Wigforss force in Sweden, Van Shockley in Australia suspects he mistakenly got a check because he receives Social Security from having worked in the U.S. before moving overseas.

SHOCKLEY: First, I thought it was a joke. And then I went down to the bank. (Unintelligible) Says, can you do some way of verifying that this is legal? And the girl come back after five minutes and says it's legal. You got the money. Thank you, ma'am. I didn't ask for the money. I didn't expect any money. But as soon as I got it, I stuck it in the bank (laughter). He ain't getting it back (laughter).

PFEIFFER: Shockley attributes the mistake to U.S. government incompetence.

SHOCKLEY: Complete stupidity - they're just not doing their job properly.

PFEIFFER: U.S. Treasury officials said they are, quote, "continuing to assess the accuracy of the stimulus program and the recovery efforts for any erroneous payments." In the meantime, they told NPR, the IRS is relying on individuals to voluntarily return these payments.

Sacha Pfeiffer, NPR News.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

Tags: Series: The Coronavirus Crisis