IRS Sends $1,200 Stimulus Checks to Ineligible Foreign Students

By David North on May 4, 2020

Topic Page: Covid-19 and Immigration

America's media has finally tumbled to the fact that the IRS is sending those $1,200 stimulus checks to aliens who are not qualified to receive them, a prospect we raised weeks ago.

But what Pro Publica found is not exactly what we predicted as a problem: They reported on a pattern of sending the checks to foreign students who filed the wrong income tax form for either 2018 or 2019; they used the IRS 1040, which is for citizens and resident aliens, rather than the more obscure 1040NR for non-resident aliens.

These checks are supposed to go only to citizens, green card holders, and aliens the IRS defines as resident aliens; foreign students in their first five years in this country are not so regarded.

The unwitting recipients of the checks are students who are legally in the country, are using Social Security numbers legitimately issued to them, and, like the rest of us, did not file for the payments, so this is a color-it-grey, not a purely black, problem. I worry about aliens who are illegally in this country and who use purchased or family relic SSNs when they file their 1040s, getting income tax refunds and the $1,200 checks despite their abuse of both the immigration law and the SSNs.

The misuse of IRS form 1040, which Pro Publica appears to regard as harmless, is not always benign. As one who ran a volunteer income tax assistance program for grad students at the University of Maryland for many years, I know that the 1040 is much more generous in terms of refunds than the 1040NR — there is routinely no standard deduction in the latter, as opposed to the former. When we found aliens had used the 1040 when they should have used the 1040NR we guided them through the 1040X, which usually meant that they owed IRS some money.