advertisement
advertisement

IRS stimulus check update: Unreported glitch may have misidentified people as U.S. territory residents

Some taxpayers who never received their third Economic Impact Payments from the IRS may have been ensnarled in a system to prevent duplicated checks.

IRS stimulus check update: Unreported glitch may have misidentified people as U.S. territory residents
[Source Images: Michael Burrell/iStock; Leonid Andronov/iStock]

If you’re one of the untold number of Americans whose third stimulus check mysteriously never showed up, new details may offer clues as to why.

advertisement
advertisement

Some taxpayers may have been misidentified as U.S. territory residents and mistakenly deemed ineligible to receive the payments from the Internal Revenue Service (IRS), according to people affected by the issue and correspondence seen by Fast Company. 

The misidentification was the result of a glitch that requires a manual review, some taxpayers were told by IRS representatives. Others learned of the issue only after their representatives in Congress conducted an inquiry on their behalf.

After waiting months for an Economic Impact Payment that never arrived, John Mack of Tucson contacted the office of Representative Ann Kirkpatrick of Arizona’s second district. In a written response earlier this month, the IRS said it was “reviewing information” to determine if some taxpayers had been misidentified as territory residents.

advertisement
advertisement

“It didn’t actually say I was one of the people who had been misidentified, but I find that excuse interesting,” says Mack, who has been trying to solve the mystery of his unreceived check since at least June. “So, guess I’m waiting until next year for recovery.”

Taxpayer Veronica Wadsworth said she learned about the issue after speaking with an IRS phone representative. She was told her account had a piece of code on it that had to be manually removed. “The rep told me it was indeed a glitch that put the code on my account and many other accounts,” Wadsworth says.

It’s unclear how many taxpayers have been misidentified in this way. Hundreds of frustrated would-be recipients of the third stimulus check had been gathering for months in Facebook groups and on other online forums attempting to diagnose the reason their payments never arrived. Many had been unsuccessful in contacting the IRS and some sought out their local representatives for help. In response to their concerns, the IRS previously denied that any widespread glitches had affected distribution of stimulus payments. 

advertisement

Reached for comment by Fast Company, an IRS spokesperson had no knowledge of taxpayers being misidentified as territory residents and said she would inquire further about it.

Residents of U.S. territories such as Puerto Rico, Guam, and the U.S. Virgin Islands were generally eligible to receive the third stimulus check, but their payments were distributed by local tax authorities rather than the IRS. In an attempt to prevent duplicate payments, the agency partnered with U.S. territories to identify people who filed tax returns as territory residents, according to the letter to Kirkpatrick’s office.

In March, the American Rescue Plan authorized up to $1,400 for individuals and $1,400 for each dependent. Most of the payments have been distributed via direct deposit or via paper checks.

advertisement

Many eligible taxpayers who never received one—especially those who are financially struggling—say the money would have made a huge difference. Some say they were told that their account had been misidentified only after countless hours of repeated attempts to reach the IRS by phone. As Fast Company previously reported, IRS correspondence and phone representatives had used language such as “programming error” to describe the issue. Presumably, that’s because they themselves were not yet aware of the misidentification issue.

According to more recent correspondence, people who were misidentified should receive their checks by fall 2021. Eligible taxpayers who don’t receive one by the end of the year must claim the payment as a Recovery Rebate Credit on their 2021 tax returns.   

advertisement
advertisement
advertisement

About the author

Christopher Zara is a senior staff news editor for Fast Company and obsessed with media, technology, business, culture, and theater. Before coming to FastCo News, he was a deputy editor at International Business Times, a theater critic for Newsweek, and managing editor of Show Business magazine

More