WASHINGTON/TOKYO -- U.S. President Joe Biden's COVID relief checks sent to ineligible Japanese by mistake are causing much confusion, with banks in Japan flooded with inquiries and the Internal Revenue Service asking for the return of the payments.
As the Treasury rushed to get the checks out in the mail under Biden's coronavirus economic response, many ineligible foreigners around the world appear to have received the checks, including Japanese pensioners who lived in the U.S. before 2005.
A 66-year-old man who worked in the U.S. around 1990 found the check in his mail box during the Golden Week holiday this month.
"Because there was no explanation enclosed, I wondered whether it was real," said the retiree.
He contacted his bank to see if he can cash it. "But it seems I don't qualify, so I decided not to do anything," he added.
Only U.S. citizens or foreign residents living in the country this year qualify to receive the relief payments.
In the case of Japanese receivers, the checks are believed to have been sent based on pension information under the Japan-U.S. social security agreement that took effect in October 2005.
As of 2019, more than 60,000 Japanese returnees were receiving pension payments from the U.S. The number is larger than those in other countries, such as around 20,000 in Germany and Britain.
The U.S. IRS, which is managing the payment, is now calling for unintended receivers to write the word "void" on the back of their checks and return them to its office in Austin, Texas. The IRS mailing address is: Austin Internal Revenue Service 3651 S Interregional Hwy 35 Austin, TX 78741 USA
Checks have been sent by mistake to people in more than 100 countries, according to Enda Kelleher, vice president of U.S. tax consulting firm Sprintax & Transfermate which files tax returns for nonresidents.
Japanese banks are not pleased.
"Inquiries began to increase gradually some two months ago and our call center and branch operations are being disrupted," a bank official said.
Japanese banks have no way of verifying whether the recipients are eligible. They are asking clients to check their status on the IRS website or through other means.
Many domestic lenders do not accept checks issued overseas to prevent money laundering. MUFG Bank stopped handling such checks in 2019. But some top banks do cash those checks on behalf of those who qualify at branches that handle overseas wire transfers. They must have accounts with those banks and must bring IDs.
The IRS has yet to comment on penalties it might impose on those who have failed to return the checks or cashed them by mistake.