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A growing number of nonresident aliens, who are not eligible for economic impact payments, have received the stimulus checks – and do not know what to do with them, Donna Kepley, president of international tax consulting firm Arctic International, told FOX Business.
An alien is defined by the IRS as an individual who is not a U.S. citizen or U.S. national. A nonresident alien is an alien who has not passed the green card test or the substantial presence test.
Many of Kepley’s clients are foreign elite universities, museums and hospitals, meaning they represent scholars, students, researchers and other people who come to the U.S. legally for work.
Nonresident aliens are required to file different tax returns than U.S. citizens. However, Kepley said since English is not the native tongue for many nonresident aliens – and their paperwork is not available online – they sometimes mistakenly file the wrong return.
The IRS based its economic impact payments on 2018 or 2019 tax returns, so these people received the money based on their inaccurate returns.
Clients started reaching out to Kepley as soon as the economic impact payments began being deposited – but there is no clear method for nonresident aliens to return the cash to the IRS.
Since the tax agency has been operating with a limited staff amid coronavirus precautions, there are no employees answering the phone number individuals are supposed to call for mistaken payments. Even taking into account the staffers who have been recently brought back to work, these phone lines are expected to remain unmanned.
Kepley has spoken with the tax agency, and it is asking nonresident aliens who have received a payment to file an amended return to fix their initial mistake.
Filing the wrong return is considered fraud and can result in individuals experiencing immigration-related consequences, including being unable to extend visas, being denied re-entry and even deportation.
However, the agency is still working on a process for people who are trying to return the $1,200 payments, Kepley said.
“Even if they try to send it back, it’s so difficult that they may just end up keeping it,” Kepley added.
The IRS did not immediately return FOX Business’ request for comment as to whether it was working on a process to accommodate these individuals.
Kepley also noted that a number of these checks may go unclaimed if they are sent to closed bank accounts or former addresses.
Last week the IRS said it had issued nearly 90 million economic impact payments as of April 17. More than 150 payments will be sent out.