EIP 3 Issued in Error

[Patrick Michael]

Clients daughter filed on her own and claimed herself in error (she is dependent of her parents).  She had already received the $1,400 for EIP3 before the error was discovered.  I have amended her return so her parents are now claiming her.  Any idea's on what to do for the $1,400 for EIP 3.?  Wait for the IRS to catch it? Is there anything that can be done proactively to return the money? Google search did not turn up anything.

Thanks.

[Lion EA]

The IRS has said they will continue to issue EIP3 as returns are filed until about September.

[GraceNY]

My guess is that when you file the parent's return, the IRS will see that the dependent's SSN was already issued the $1,400 and therefore only give the parent's their $2,800 ($1400 +$1400).

I would not send the dependent's $1,400 back.  I'd wait and see how it plays out on the parent's return.

[Pacun]

Don't file the parents 2020 yet, amend child's return, wait for it to clear and then file parents. I bet you that parents will get her $1,400 if they claimed her in 2019. There is a lot of money thrown up the air by Congress and any one can grab it. 

How hard was to do it the same way it was done when W was president? That time, it was consolidated and some people had to return it. 

[Lee B]

EIP3 affects 2021 returns,not 2020 returns

[Pacun]

I think I shared this before:

in 2019, only grand mother worked. Three daughters, 5 gran kids.  Grand mother claimed two children from each daughters 1 and 2, and the only child from the third daughter. 

She got EIP1 and EIP2 for herself and five children. 

In 2020, the two daughters with two children each worked and filed their returns with their children. Again those children were correctly used to claim EIP1 and EIP2 on daughters' returns.

For 2020 Grand Mother claimed ONLY one child from the third daughter and got rejected. Third daughter filed with 61 income and claimed her child by mistake... well... not really. Remember that the smell of money is strong and she wanted some money.  So, while I waited a bit to amend third daughter's 2020 filing to free up the child, IRS used 2019 filing from Grand Mother and issued her a check for 7K for EIP3. 

So, I believe Patrick's client will also get a nice EIP3 check based on 2019 filing.

[TexTaxToo]

On 3/30/2021 at 12:45 PM, Patrick Michael said:

Is there anything that can be done proactively to return the money?

There are instructions for returning the payment:

https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-i-returning-the-third-economic-impact-payment

However, they do not say why or when you should do so.  I guess if someone just doesn't want the money, they can return it.

[Slippery Pencil]

Why are so many people hellbent on returning these payments.  The payments don't have to be returned.  What good can come of returning it?  When your client returns it, then the irs doesn't pay the $1400 to the parent because the payment was already sent, are you going to resolve the issue for free?  Keep the damn payment.  If the irs doesn't catch it and issues a payment to the parent also, lucky for them. 

[Lee B]

Yeah, this like being caught up in a whirlwind of distraction