 In our newest reports, we determined that the IRS accurately locked more than 99% of deceased taxpayers' accounts but issued a pandemic-related tax credit to 300,000 ineligible taxpayers. Here's a quick breakdown of what we found.
Recovery Rebate Credit Payments Were Issued to 300,000 Ineligible Taxpayers
Why did we do this audit?
This audit was conducted to ensure Recovery Rebate Credit (RRC) payments were issued only to eligible taxpayers.
The American Rescue Plan Act of 2021 authorized a refundable credit of up to $1,400 for eligible individuals and directed the IRS to issue advance payments, also known as Economic Impact Payments.
Most eligible taxpayers already received or claimed the credit. Those who didn't had until April 2025 to claim it.
At the direction of the Department of the Treasury, in December 2024, the IRS announced they would begin issuing payments to eligible taxpayers who didn't claim the credit.
What did we find?
In January 2025, the IRS issued 1.2 million payments totaling $2.4 billion to individual taxpayers who the IRS determined were eligible for the RRC. However, we identified that nearly 301,000 of these payments (25 percent of all payments) totaling $447.8 million were issued to ineligible taxpayers.
As of May 2025, we determined that nearly 29,000 of the erroneous payments had already been recovered by other processes or controls, such as voluntary repayment. The IRS will use its erroneous refund procedures to recover the remaining 272,000 erroneous RRC payments.
 For more information:
More Than 99 Percent of Deceased Taxpayers’ Accounts Are Accurately Locked
Why did we do this audit?
The IRS uses an indicator to lock a deceased taxpayer’s account, which prevents their personal information from being used to file a fraudulent tax return. In August 2023, we reported that more than 20,000 taxpayer accounts were locked in error due to human and computer programming issues. We made seven recommendations for improvement, and the IRS agreed with six of them.
We performed this audit to determine whether the IRS made improvements to the account lock process for deceased individuals.
What did we find?
We reviewed nearly 6.9 million taxpayer accounts with a deceased indicator placed on their account between 2022 and 2024 and found that 99.8% were accurate. However, more than 13,500 accounts were incorrectly locked even though Social Security Administration (SSA) data showed no date of death. Improperly locking taxpayer accounts can burden legitimate taxpayers because they're unable to file their tax return and cannot receive a refund until they authenticate themselves with the IRS.
Alternatively, we found that nearly 31,000 deceased taxpayers' accounts were not locked despite SSA data showing these individuals passed away in 2022. Deceased taxpayer accounts that aren't locked by the IRS could be used by fraudsters to file tax returns and obtain fraudulent refunds.
The IRS fixed the underlying processing error that caused this and expects these accounts to be locked during a system update in January 2026.
For more information:
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