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Economy

Surprise check: Biden stimulus mailed to Japanese by mistake

Ineligible foreigners receive payments amid US focus on speed

The Biden administration tried to get stimulus checks out to families as quickly as possible under its American Rescue Plan.    © Reuters

WASHINGTON -- Stimulus checks of up to $1,400, the centerpiece of President Joe Biden's coronavirus relief package approved in March, are reaching unintended recipients -- noncitizens who are no longer living in the U.S.

Japanese citizens who have left America a long time ago appear to be among them. Some people posted on the internet that they were surprised to receive stimulus checks from the U.S. Treasury. 

The checks were sent out based on incomes claimed on tax returns to U.S. citizens and residents. The U.S. Internal Revenue Service says noncitizens who are living outside the U.S. in 2021 do not qualify. 

In the case of Japanese citizens, those who lived in the U.S. before the two nations' social security agreement took effect in October 2005 appear to be the recipients. Before the bilateral deal, Japanese expats working in the U.S. were required to pay into America's social security program, thus the IRS still has their records. 

The agreement made it easier for Japanese citizens to receive social security after returning to Japan. 

While the IRS claims that it checks the latest tax-filing information, those who have not filed tax returns for years might have received payments based on the recipient lists compiled by the Social Security Administration. 

The Social Security Administration told Nikkei that it compiled separate lists for recipients at home and abroad.

Biden's American Rescue Plan has earmarked more than $410 billion for stimulus payments to individuals. Roughly $388 billion has been distributed through early May, meaning that in just two months more than 90% of scheduled payments have been given out via check or direct deposit.

Similar mistakes happened under former President Donald Trump, who oversaw payments of up to $1,200 in March 2020 and then up to $600 in December.

After the first stimulus payments, U.S. media reported that foreign nationals living overseas had also received checks. A government audit reported that checks totaling $34 million had been mailed out to overseas addresses by late May 2020. But the amount includes payments to U.S. citizens living overseas, and there is now way to discern how much was sent to unqualified foreign nationals. 

The IRS says foreign nationals overseas who received the checks should void them and send them back, but it declined to elaborate on the punishment for those who have already cashed them.

The government's focus on swift payments appears to have come at a cost of eroding accuracy and fairness. The U.S. economy has in effect regained pre-pandemic strength. Further scrutiny into how the money was spent will be needed to bolster the effectiveness and accuracy of future spending programs.

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