THE NEUTRAL ZONE
At the same time Congress is negotiating a second round of Economic Impact Payments, a new report found the IRS sent the first round of $1,200 checks to foreign workers in over 129 countries. Nearly $43 million could have been sent overseas according to a report by NPR. The Internal Revenue Service used the tax data to mail the checks overseas, to their U.S. residence, or deposit it directly into bank accounts in April. In addition, the IRS accidentally sent $1.4 billion in checks to dead Americans, which were canceled in late July.
The checks went to foreign students and temporary workers F-1 and J-1 visas who filed taxes. Students who receive the checks mistakenly filed their taxes on Form 1040, rather than Form 1040-NR (non-resident). Tax professionals believe the mistake is common among first-time filers who use e-file systems such as TurboTax, which are intended only for U.S. residents and citizens. The errors are difficult to detect because immigrant Social Security numbers have the same amount of digits as U.S. citizen Social Security numbers.
Current and former students around the world fear their visas could be in jeopardy if they do not return the checks, however, the IRS has issued no guidance on repaying the checks. Some workers hoped to return to the U.S. and spend the checks during summer jobs, but the Trump administration suspended H1-B and H2-B visas for highly skilled labor and temporary work.
Foreign Workers Mistakenly Received $1,200 Stimulus Checks—And Can Spend Them In Their Own Countries – Forbes – 8/5/2020
Another problem with the checks is related to a Trump administration halt on visas for seasonal workers, as people in that category have received checks, but cannot reenter the U.S. in order to spend the money here.
IRS mistakenly sends stimulus checks to foreign workers – Politico – 5/1/2020
“There are so many people who aren’t getting the check who could use it, and so when you see people who weren’t intended it’s disconcerting,” said Enda Kelleher, vice president for Sprintax, the tax firm that conducted the survey.
Undocumented Workers: The Essential, Exposed, and Expendable – Harvard Political Review – 8/1/2020
Undocumented immigrants make up 5.5 million of the workers in essential industries in the United States, including the 846,100 working in restaurants. At work, they are vulnerable to both the coronavirus and deportation, yet they lack access to the same protections as their coworkers. They do not receive stimulus checks. They do not qualify for unemployment benefits and cannot access Medicaid. They have few resources to report mistreatment and fear deportation by Immigration and Customs Enforcement.