A glitch within the Internal Revenue Service has reportedly led to as many as thousands of foreign nationals receiving coronavirus stimulus checks intended for U.S. residents.
Many of the $1,200 stimulus checks sent last month to Americans coping with the economic downturn also went to foreign workers, many of whom are living overseas, according to Politico.
Allegations of misdirected coronavirus funds come from tax consultants and even recipients themselves.
Many of the unintended recipients are racing to spend the money before the IRS realizes what went wrong.
“We were contacted by a lot of our clients all of a sudden, on the one day when they started hitting their accounts or that the checks started going out, asking what to do,” Donna Kepley, president of the tax firm Arctic International, told Politico.
The tax firm has spoken with “dozens of clients” in the past days, Politico reported.
“And so we had to try to figure out how to return it, which is not easy,” Keply went on, adding that “thousands” of foreigners likely received checks in April.
Young workers who have visited the U.S. in the past couple of years, many of them gone well before the coronavirus pandemic began, were shocked to discover $1,200 checks directly deposited into their banks.
The ones who spoke publicly about the issue said they wanted to return the money out of fear of reprimand, but were unable to reach the IRS.
Politico spoke to three student visa holders who unexpectedly found an extra stack in their bank account.
“One day I just saw my account and I had 1,200 bucks without even requesting anything,” a French citizen who finished a graduate program at University of Toledo in 2018 said about the surprise.
“I knew they were planning to give stimulus payments but I didn’t know when it was happening.”
How did this glitch occur?
The incorrect payments are believed to be a result of a common tax-filing glitch, specifically with foreign college students on F-1 and J-1 exchange visas.
These foreign students, who are able to work summer jobs, typically use TurboTax or similar e-filing services without realizing that these programs are intended for U.S. residents.
Consequently, there are many temporary workers who file incorrect tax forms each year.
The IRS usually does not catch this error because Social Security numbers assigned to nonimmigrant workers are the same number of digits as those assigned to U.S. citizens — making both sets look identical.
While this usually doesn’t cause a problem during tax season, it did this year when the U.S. government apparently mistook many foreign workers as eligible for these one-time stimulus checks.
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