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My sister died last year. I am the executor and she added me to her checking account so I could handle her finances. Haven't done her final 2019 taxes yet. IRS deposited $1,200 into checking account for her stimulus amount not knowing she has died. What do I do with this? How do I give it back?

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Leave it there, when you file her final return they will recapture the money.
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bfgraue Apr 2020
Yes. Thanks. This is what I was hoping for.
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The IRS won’t be recapturing the money. Per the tax experts the money can’t be clawed back.
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Depends on what experts you listen to.

There has been no decision on whether they will go after money sent in error.

I would be very careful spending money that is not yours and that was sent in error.

The moral and ethical thing to do is to send it back.

Unfortunately in times of confusion people get greedy, like the parents collecting free lunches and then selling them. It is better to the right thing than the easy thing. Karma is real. I am not accusing you of any wrong doing.
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bfgraue Apr 2020
I have no intention of spending this money as I know since she is no longer alive, she shouldn't have gotten it. The issue is that I was hoping to finalize her estate and distribute the balance to her son, the beneficiary of her estate. Now it appears I have to keep the checking account open in order for the IRS to take the money back. I guess I assumed the IRS might have checked social security numbers to see if the person was still alive before they distributed the money.
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Bf, the social security administration reports deaths and they are not very efficient right now, probably never very efficient in reporting to all of the agencies as they are the ones that compile and disseminate the information to every other government agency.
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First I'd make sure that they weren't trying to send it to y-o-u via that joint account. If you (were entitled to and) received your check already, you can either call or email the IRS. I'm sure they'd be happy to help such an honest person. Good for you!
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JoAnn29 Apr 2020
The only way they would know OP is on the acct is if she had her IRS refund direct deposited there.
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If your the Executor, you can deposit the check into whatever account that you are using for estate.

Rules are in 31 CFR 240.15, “checks issued to deceased payees”.

Google 31 CFR 240.15, there will be one or 2 with easy to follow explanations on how this works and doesn’t work. It’s federal.

The Stimulus check is NOT a re-occurring benefit payment, so it’s legal to deposit it. It’s a 1 off type of payment. Just hold off on that final distribution so you can include the Stimulus $ in the $ to the heir. The deceased was entitled to it as based on what she filed for 2018 taxes. Now if it had been a re-occurring benefit payment, like monthly SS $ or monthly pension, then those can be recaptured or clawed back.

It’s exactly like Worried in Cali described it. The CARES Act allows if someone is sent more $ that they are supposed to receive, they are allowed to keep it. It’s done to ease any “administrative burden”.

Stuff like this ($ to deceased) happens way, way more often than folks realize. If you filed property damages for Deepwater Horizon (BP oil spill 2010), the was a smallish check winter 2019 from one of the Junior oil companies settlement. You know folks died from 2010-2019. But if you left probate open, you had someplace to deposit the $ into. Nice!
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There is a post asking about a stimulus check and a deceased spouse. I looked up what "happens when a stimulus check is sent to a deceased person." According to the Wall Street Journal, it must be returned.

https://www.wsj.com/articles/stimulus-checks-sent-to-dead-relatives-should-be-returned-mnuchin-says-11588103323
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https://bogleheads.org/forum/viewtopic.php?f=2&t=314133

Here is the latest.
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Yep they announced today that all the payments to dead people and to incarcerated people must be returned.
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