@smithmc
if you follow the IRS instructions to the letter, then you would return the uncashed check but you would also claim of the rebate on her final tax return, if a tax return is filed in her name for 2020. This seems to me to be rather pointless, and also likely to cause much confusion, because if the IRS has recorded that she received a stimulus check, they will disallow the rebate credit on the tax return.
I would simply deposit the check, although it may have to be deposited in an account for her estate and then moved from her estate account into an account for her beneficiary or spouse if she was married. This will depend on state law. If you can successfully deposit the check, then I would not claim the rebate on her final tax return. I don’t see that this would create any liability in the future, because even though the IRS requested that checks be returned for deceased taxpayers, it is also absolutely clear that under the law, she is entitled to the rebate. At the worst, if the IRS ever did demand a return of the stimulus check, you could pay the IRS and then turn around and file an amended tax return to claim the rebate, and I hope that anyone at the IRS would agree that this is a pointless exercise.
