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Puerto Rico Treasury begins to recover $45.6M in ineligible stimulus payments

Puerto Rico Treasury Secretary Francisco Parés-Alicea has announced that about 34,000 taxpayers will start receiving notifications informing them of their ineligibility for the economic impact payments they received.

Approximately 34,233 taxpayers will be notified about the recovery process of the economic impact payments, which were distributed to ineligible individuals and not returned as instructed during the COVID-19 pandemic.

The secretary emphasized that the recovery process pertains to nearly 1.8 million families who received stimulus payments during the pandemic, focusing on “clarifying the status of only 0.0001% of them.”

“The total disbursements for the $1,200 and $600 Economic Impact Payments amounted to $4,284,996,878.92, distributed to 1,889,058 families,” Parés-Alicea said. “The 34,233 recovery notifications represent a total of $45,558,032, or 0.0001% of the total disbursements, and 0.018% of the total number of families who received the aid.”

The economic impact payments were provided under the Coronavirus Aid, Relief and Economic Security (CARES) Act and the COVID-Related Tax Relief Act of 2020 federal laws.

“As the intermediary with the federal Treasury [department] during the distribution of aid, we now also have the obligation to make all reasonable efforts for the recovery and return of money granted to ineligible individuals,” the Treasury chief said. 

In response to the economic crisis caused by the pandemic in Puerto Rico, Parés-Alicea said, both the Treasury Department and the Internal Revenue Service (IRS) initiated economic assistance to residents, occasionally resulting in duplicate payments.

“As we started exchanging information files with the IRS, the number of duplicate payments was substantially reduced, and we initiated an educational campaign to encourage Puerto Rico residents who received duplicate aid to return the payments to the IRS,” the secretary said. “Although the effort was effective, there are certain payments that we need to clarify, in accordance with our collaborative commitment with the IRS.”

According to the island’s Treasury Department, recoveries are primarily due to: recipients receiving duplicate payments from both the IRS and the Treasury Department; discrepancies in the provided names and Social Security information; recipients claiming advance payments as refundable credits on their 2020 Individual Income Tax Returns; and payments made to individuals not qualifying as bona fide Puerto Rico residents for tax years 2019 and 2020.

Parés-Alicea specified that there are 27,218 cases of duplicate payments, 5,338 cases of mismatched information and 1,677 cases of payments to individuals who claimed the payments but were not bona fide residents.

“The recovery process establishes deadlines for taxpayers who receive the notice to take action and prevent this ineligible stimulus from becoming a debt collectible by the Treasury Department. This process does not include payment plans, so the recommendation is to not ignore the notice,” he cautioned.

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