We pay dead people.
That could be a motto for the Internal Revenue Service when it comes to economic stimulus payments.
For those who qualified for the money based on 2007 income and then died, their heirs cash in.
The IRS Web site, irs.gov, says:
“Stimulus payments will be issued in the name of the individual eligible for payment on a filed 2007 income tax return … This includes situations where a person dies after filing a return or where the final 2007 income tax return was filed by a personal representative or surviving spouse.”
The IRS says it is only following the law as passed and has not calculated how many of the almost 105 million people to receive the checks are dead.
The payments are up to $600 a person or $1,200 for a married couple, with an additional $300 for each child, and so far have added up to more than $86 billion.
Julie Zimmermann expects to collect $97 of a stimulus payment because of the death of her father. John Studnicka, a retired salesman and Navy veteran, was 80 when he died on Mother's Day 2007, said Zimmermann, a mortgage banker who lives in Mukwonago, Wis. Studnicka's final tax return has just been completed, and the estate is awaiting a stimulus check to be divided among several heirs, Zimmermann said.
Like the $600 stimulus payment she and husband Gary received from their own taxes, her $97 share of her father's payment will find its way into their bank account, she said.
David Werner, a certified public accountant with the Milwaukee firm of Scribner Cohen & Co., said heirs of a client also probably will bank the $600 they will get. He is handling the estate of the 92-year-old widow who died last year.
The idea of the plan was to have the money spent to stimulate the economy, and for that reason, upper-income taxpayers, who are more likely to save it, were excluded. Following that logic, paying rich heirs “is kooky,” Werner said.
“But the macro economic theory of the program makes sense,” he said. “It is a way to stimulate some spending.”
Paul Wickert, president of Acc-U-Rite Tax & Financial Services Inc. in Milwaukee, prepared Studnicka's final tax return and has dealt with a number of questions about the payments. Looking at it from every angle, he believes “it's a miracle the IRS was able to pull this off, given with how this was dumped in their lap.” Finding out the economic circumstances of heirs before making payments to estates would have been an incredible complication.
As a result, the dead people get paid.