UPDATE: Domestic abusers are taking survivors' stimulus checks -- and lawmakers want the IRS to do something about it
By Meera Jagannathan, MarketWatch , Andrew Keshner
Domestic-violence survivors often use cash infusions as a springboard toward safety
While millions of Americans have saved, spent or invested their stimulus checks, some domestic-violence survivors have found themselves deprived of the financial lifeline and often saddled with the knowledge that their abuser has the money.
Now, senators and advocates are pressing the Internal Revenue Service to send replacement checks to survivors and set rules that would prevent abusers from intercepting the cash if there's a second round of stimulus checks (http://www.marketwatch.com/story/get-ready-for-another-round-of-stimulus-checks-11595355666).
"A stimulus payment can make a huge difference in financially easing the burdens many survivors and their children are facing with remaining safe and secure economically," said Sonya Passi, the founder and CEO of FreeFrom, an organization focused on increasing domestic-violence survivors' financial security.
Without access to the money they're entitled to, some survivors are forced to rely on their abusers' financial support to support their children -- and, Passi said, they worry that could one day be used against them in court. "The pandemic has caused many survivors to fall further into debt and placed even more limitations on their ability to financially seek safety from abuse and harm," she told MarketWatch in an email.
It's tough to quantify how many victims are missing out on the $1,200 payments and potential $500 payments per child. But it has happened frequently enough for tax lawyers and domestic-violence advocates to offer anecdotal evidence. Passi, who said her organization had heard from at least 40 survivors unable to access their stimulus payments, shared two such accounts.
"My abusive soon-to-be-ex-husband is withholding my half of the stimulus check as another way to control me," one person said, according to Passi. "Due to this I am struggling to pay for fees that would allow me to move into a new place."
"My ex-husband claimed me as a dependent on his taxes even though I made $11,000 of my own money in 2019, and provided child care for our toddler," said another. "Now we are separated, and not only did I not receive any of the tax return, but I wasn't eligible for the stimulus check either."
These are just the people who were aware of the payment. "Harm-doers typically have access to survivors' identifying information and bank accounts and use them to abuse, monitor and control survivors," Passi said, "so if a stimulus check is deposited, the survivor may never actually see it."
The National Domestic Violence Hotline's advocate log reveals similar stories, turning up at least three specific mentions of stimulus-check trouble. One abuser tried convincing a survivor that $60 amounted to half the check, according to excerpts shared with MarketWatch. Another abuser refused to share the money for a divorcing survivor's rent and car payment. Still another cashed the payment and bought a motorcycle, leaving the survivor to look after debts and two children.
A national COVID-19 economic-impact survey (https://csaj.org/Covid-19_DataDashboard)of 608 U.S. direct-service providers conducted by the Center for Survivor Agency and Justice and other partner organizations, meanwhile, estimated that about 40% of domestic and sexual-violence survivors served by those groups had mentioned concerns about stimulus checks.
Given that the vast majority of abuse victims report also experiencing financial abuse, "we can reasonably expect perpetrators who leverage financial dependency as a form of control are taking advantage of this additional opportunity," said Teal Inzunza, the program director for economic empowerment at the Urban Resource Institute, a New York-based service provider for domestic-violence survivors.
Passi identified a handful of survivor populations that have encountered structural hurdles to receiving stimulus checks: those who lack a permanent address and/or are experiencing homelessness; those who weren't involved in tax filing, who were unable to claim the kids as dependents because their abuser did, and/or whose financial abuse included tax fraud; unbanked survivors who used check-cashing services that took a cut of their check; and undocumented survivors, who were excluded from eligibility.
The push to get stimulus checks to domestic violence survivors parallels ongoing efforts to get stimulus checks to people experiencing homelessness (http://www.marketwatch.com/story/they-are-still-citizens-so-they-should-be-able-to-access-that-money-inside-the-quest-to-claim-stimulus-checks-before-the-deadline-2020-07-21), who face similar financial roadblocks standing between them and their money.
'One more way the abuser is exerting control'
As it quickly cut stimulus checks, the IRS looked at 2019 tax returns to determine eligibility. If those returns weren't yet filed, it looked at 2018 returns.
That means the agency could have been relying on outdated information and sending a stimulus check to an account controlled by an abuser or an address the survivor had left.
Nancy Rossner, a senior staff attorney at the Community Tax Law Project, has seen this scenario unfold. Other times, the abuser and survivor have separated but the abuser unilaterally filed a joint return and pocketed both stimulus checks.
"This is one more way that the abuser is exerting control and power over the victim," Rossner said.
She's worked with approximately 15 domestic violence survivor clients who have been deprived of their stimulus check. But there's no clear answer on how to fix the problem, she said, let alone do it quickly.
Rossner had advised clients to submit "superseding" tax returns by July 15. Those returns, treated as the most up-to-date version, can change the filing status to married, filing separately or head of household. Most importantly, they can include new bank account or mailing address information.
Even if someone missed the deadline, Rossner said they could still mail in a return and a letter explaining the circumstances. This would at least trigger an IRS review of the original return and give a survivor an opportunity to dispute the first return's validity, she said.
The IRS hasn't declared whether a superseding return will resolve the matter, Rossner said. What's more, a superseding return has to be filed as a paper return and the IRS is wading through a backlog (http://www.marketwatch.com/story/were-focused-on-the-paper-returns-as-the-irs-re-opens-offices-how-long-will-it-take-to-receive-your-tax-refund-2020-07-15) of paperwork after it temporarily closed offices.
At the very least, a superseding return could set up survivors to receive the second payment, she said.
Sen. Catherine Cortez Masto, a Democrat from Nevada, and 35 of her colleagues sent a letter (https://www.cortezmasto.senate.gov/imo/media/doc/Cortez%20Masto%20Letter%20to%20Treasury%20IRS_Stimulus%20Payments%20for%20DV%20Survivors_6.19.20.pdf) to the IRS last month urging the agency to make sure survivors get the money to which they are entitled. That followed a similar letter (https://www.ernst.senate.gov/public/_cache/files/d22913b7-add8-4a3f-a1c5-8d10180ed46c/DFD463EB566190EF529518485F2B86B5.2020.04.06---ernst-letter-to-irs-re-stimulus-check-for-dv-survivors.pdf) that Sen. Joni Ernst, a Republican from Iowa, sent the IRS in April.
The Cortez Masto letter contained recommendations, including a dedicated hotline where survivors could report misdirected stimulus checks, guidance about superseding returns and public explanations telling taxpayers what they should do if they aren't with their spouse anymore. (The American Bar Association's taxation section also wrote the IRS (https://www.americanbar.org/content/dam/aba/administrative/taxation/policy/2020/051220comments.pdf)in May with suggested ways to help survivors, such as dividing money into separate bank accounts when underlying tax returns had paperwork instructing a split refund.)
During a late-June Senate Finance Committee hearing, Cortez Masto asked (https://www.c-span.org/video/?473495-1/senate-hearing-covid-19-irs)IRS Commissioner Charles Rettig what his agency had been doing "to get replacement checks to victims of domestic violence who are in desperate, desperate need right now."
Rettig said the issue was a priority. "Our people care, and they care a lot," he said. "To have a victim of domestic violence also not be able to receive the payment, particularly at this time of need, does not sit well with us."
The IRS did not elaborate on any further steps it will be taking when reached for comment Tuesday.
A spokesman pointed to instructions for people to trace a stimulus check (https://www.irs.gov/coronavirus/economic-impact-payment-information-center)that has been issued but not received. Taxpayers can call the IRS, though they may experience long wait times. They can also start a trace by mailing a form -- but if they're married, both spouses need to sign.
"The delivery of these stimulus payments directly into the hands of domestic violence survivors is vital to their safety and wellbeing," Cortez Masto told MarketWatch in a statement. "I'll continue to do everything I can to push this administration to prioritize payments to survivors of domestic violence so they receive the payments they are legally entitled to."
'The bottom is literally falling out from underneath people'
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August 01, 2020 15:55 ET (19:55 GMT)
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