After the shutdown of business due to social distancing and public health, the government noted it was not the fault of any citizen affected and wanted to help out its citizens. The Treasury department examined a number of alternatives and decided to use the IRS as the best database. This was a good choice except when someone dies they need to file an income tax for the time the person was alive. The IRS did not flag these accounts and during an audit, the Government Accountability Office discovered the error.

According to an article by Alan Rappeport of the New York Times Service, in a rush to pump the money into the economy to allow bills to be paid, the IRS knew of the risk that money would go to dead people, but there was political capital to be made. Treasury Secretary Steve Mnuchin said heirs should give the money back. According to Michael Graetz, a Columbia University law professor, said it is not cost effective to try to recoup the $1,200 by ligitiation.

The IRS said they will do better, if another stimulus check is to be sent.

Linking to dividend paying companies, often we believe that more data than actually is can and does speak to one another. In the above case, the IRS was under political and economic pressure to send out the money as quickly as possible, items will be missed. In profitable, dividend paying companies we tend to believe they have time on their sides. The issues can be worked out before the action takes place or there are very reasons for errors. The government agencies were pushed to action and mistakes are made – whose fault and who will take responsibility?

There are more questions than answers, till the next time – to raising questions.