Social Security, Treasury target taxpayers for their parents’ decades-old debts.
Evelyn Hockstein/For The Washington Post -
Mary Grice of Takoma Park, MD, talks with her attorney Robert Vogel, at Vogel's home in Rockville Maryland, April 5, 2014.
A few weeks ago, with no notice,
the U.S. government intercepted Mary Grice’s tax refunds from both the
IRS and the state of Maryland. Grice had no idea that Uncle Sam had
seized her money until some days later, when she got a letter saying
that her refund had gone to satisfy an old debt to the government — a
very old debt.
When Grice was 4, back in 1960, her father died, leaving her
mother with five children to raise. Until the kids turned 18, Sadie
Grice got survivor benefits from Social Security to help feed and clothe
them.
Now,
Social Security claims it overpaid someone in the Grice
family — it’s not sure who — in 1977. A
fter 37 years of silence, four
years after Sadie Grice died,
the government is coming after her
daughter. Why the feds chose to take Mary’s money, rather than her
surviving siblings’, is a mystery.
Across the nation,
hundreds of
thousands of taxpayers who are expecting refunds this month are instead
getting letters like the one Grice got, informing them that because of a
debt they never knew about — often a debt incurred by their parents —
the
government has confiscated their check.
The Treasury
Department has
intercepted $1.9 billion in tax refunds already this year
— $75 million of that on
debts delinquent for more than 10 years, said
Jeffrey Schramek, assistant commissioner of the department’s debt
management service. The aggressive effort to c
ollect old debts started
three years ago — the result of a single sentence
tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.
No
one seems eager to take credit for reopening all these long-closed
cases. A
Social Security spokeswoman says the agency didn’t seek the
change; ask Treasury. Treasury says it wasn’t us; try Congress.
Congressional staffers say the request probably came from the
bureaucracy.
The only
explanation the government provides for
suddenly going after decades-old debts comes from
Social Security
spokeswoman Dorothy Clark: “
We have an obligation to current and future
Social Security beneficiaries to attempt to recoup money that people
received when it was not due.”
Since the drive to collect on very old debts began in 2011, the Treasury Department
has collected $424
million in debts that were more than 10 years old. Those debts were
owed to many federal agencies, but the one that has many Americans
howling this tax season is the
Social Security Administration, which has
found
400,000 taxpayers who collectively owe $714 million on debts more
than 10 years old.
The SSA expects to have begun proceedings against
all of those people by this summer.
“It was a
shock,” said Grice,
58. “What incenses me is
the way they went about this. They gave me
no
notice, they
can’t prove that I received any overpayment, and they
use
intimidation tactics, threatening to report this to the credit bureaus.”
Grice
filed suit against the Social Security Administration in federal court
in Greenbelt,MD., alleging that the government
violated her right
to due process by holding her responsible for a $2,996 debt supposedly
incurred under her father’s
Social Security number.
Social
Security officials told Grice that six people — Grice, her four
siblings and her father’s first wife, whom she never knew — had received
benefits under her father’s account. The government doesn’t look into
exactly who got the overpayment; the policy is to seek compensation from
the oldest sibling and work down through the family until the debt is
paid.
The Federal Trade Commission,
on its Web site,
advises Americans that “
family members typically are not obligated to
pay the debts of a deceased relative from their own assets.”
But Social
Security officials say that if children indirectly received assistance
from public dollars paid to a parent,
the children’s money can be
taken, no matter how long ago any overpayment occurred.
“While we
are responsible for collecting delinquent debts owed to taxpayers, we
understand the importance of ensuring that debtors are treated fairly,”
Treasury’s Schramek said in a statement. He said
Treasury requires that debtors be given due
process.
Social Security spokeswoman Clark, who declined to
discuss Grice’s or any other case, even with the taxpayer’s permission,
said the agency is “sensitive to concerns about our attempts to arrange
repayment of overpayments.” She said that before taking any money,
Social Security makes “multiple attempts to contact debtors via the U.S.
Mail and by phone.”
Grice, who works for the Food and Drug
Administration and lives in Takoma Park, in the same apartment she’s
resided in since 1984,
never got any notice about a debt.
Social
Security officials told her they had sent their notice to her post
office box in Roxboro, N.C. Grice rented that box from 1977 to 1979 and
never since. And
Social Security has Grice’s current address: Every
year, it sends her a statement about her benefits.
“
Their record-keeping seems to be very spotty,” she said.
Treasury
officials say that before they will take someone’s refund, the agency
owed the money must certify the debt, meaning
there must be evidence of
the overpayment. But Social Security officials told Grice they had no
records explaining the debt.
“The craziest part of this whole
thing is the way the government
seizes a child’s money to satisfy a debt
that child never even knew about,” says Robert Vogel, Grice’s attorney.
“They’ll say that somebody got paid for that child’s benefit, but the
child had no control over the money and there’s no way to know if the
parent ever used the money for the benefit of that kid.”
Grice,
the middle of five children, said neither of her surviving siblings —
one older, one younger — has had any money taken by the government. When
Grice asked why she had been selected to pay the debt,
she was told it
was because she had an income and her address popped up — the correct
one this time.
Grice
found a lawyer willing to take her case without charge. Vogel is
exercised about the
constitutional violations he sees in the retroactive
lifting of the 10-year limit on debt collection.
“Can the government
really bring back to life a case that was long dead?” the lawyer asked.
“Can it really be right to seize a child’s money to satisfy a parent’s
debt?”
But many other taxpayers whose refunds have been taken say
they’ve been unable to contest the confiscations because of the cost,
because
Social Security cannot provide records detailing the original
overpayment, and because the citizens,
following advice from the IRS to keep financial documents for just three years, had long since trashed their own records.
In
Glenarm, Ill., Brenda and Mike Samonds have spent the past year trying
to figure out how to get back the $189.10
tax refund the government
seized, claiming that Mike’s mother, who died 33 years ago, had been
overpaid on survivor’s benefits after Mike’s father died in 1969.
“It
was never Mike’s money, it was his mother’s,” Brenda Samonds said. “
The
government took the money first and then they sent us the letter. We
could never get one sentence from them explaining why the money was
taken.” The government mailed its notice about the debt to the house
Mike’s mother lived in 40 years ago.
The
Social Security
spokeswoman said the agency uses a private contractor to seek current
addresses and is supposed to halt collections if notices are returned as
undeliverable.
After hours on the phone trying and failing to get
information about the debt Mike’s mother was said to owe, the Samondses
gave up.
After waiting on hold for two hours with
Social Security
last week, Ted Verbich also concluded it wasn’t worth the time or money
to fight for the $172 the government intercepted last month.
In
1977, Verbich, now 57, was in college at the University of Maryland when
he took a full-time job in an accountant’s office. Because he was
earning income, he knew he had to give up the survivor’s benefits his
mother had received since his father died, when Verbich was 4. But his
$70 monthly checks — “They helped with the car payment,” he said — kept
coming for a short time after he started work, and Verbich was notified
in 1978 that he had to repay about $600. He did.
Thirty-six
years later, with no notice, “they snatched my Maryland tax refund,”
said Verbich, a federal worker who has lived at the same address in
Glendale, Md,. for 30 years and regularly receives Social Security
statements there.
The feds insisted that he owed $172 but could provide
no documents to back up the claim.
Verbich has given up on getting his refund, but he wants a receipt stating that his debt to his country is resolved.
“I’ll put in the request,” a
Social Security clerk told Verbich, “but in reality, you’ll never get anything.”
Grice
was also t
old there was little point in seeking a waiver of her debt.
Collections can only be halted if the person passes
two tests, Clark
said:
The taxpayer must prove that he “is without fault, and [that]
repayment of the overpayment would deprive the person of income needed
for ordinary living expenses.”
More than 1,200 appeals have been filed on the old cases, Clark said; taxpayers have won about 10 percent of those appeals.
The
Treasury initially held the full amount of Grice’s federal and state
refunds, a total of $4,462. Last week, after The Washington Post
inquired about Grice’s case, the government returned the portion of her
refund above the $2,996 owed on her father’s account.
But unless the feds can prove that she ever received any of the overpayment, Grice wants all of her money back.
“Look,
I love a good fight, especially for principle,” she said. “My mom used
to say, ‘
This country is carried on the backs of the little people,’ and
now I see what she meant. This is really sad.”
(Fisher, Mard, The Washington Post, April 11, 2014, p. A1)
FORT THOMAS, Ky. – Cathy Frost opened her mail last week
expecting to receive her tax refund. Instead, the Treasury Department
sent her a notice that Uncle Sam was keeping her $344.
"I was taken aback. I had already allocated the funds. I couldn't believe it," the Fort Thomas woman said Friday.
"I didn't know the government could just keep your refund. I felt like I was being robbed."
Thousands of Americans had the same feeling when they got the same letter.
Most
of them didn't know that the Treasury Department has been confiscating
tax refunds to recover government over-payments - mainly in Social
Security benefits - from beneficiaries or their survivors.
Some of the debts, as in Frost's case, are their parents' and are decades old.
There
was such an outcry from taxpayers and politicians that the Social
Security Administration announced this week that it was going to stop
seizing tax refunds pending an SSA review.
But that doesn't help Frost, a 55-year-old single woman who just lost her job due to downsizing.
She
found out she might not get her money back, even though the SSA
overpaid her father – and not her - some 40 years ago, when Frost was a
minor.
The whole episode has left her shaking her head, frustrated with her government.
Frost said she called the 800 number on the letter last week and talked with an SSA office worker in Chicago.
"They
were unable to give me any details, only that there was an overpayment
of $869.20 that may have been dispersed to myself or any family member,"
she said.
Frost said she told the SSA rep that her father had died when she was 18.
"I
wasn't eligible for benefits, but my younger brother was 17 and my
sister was 15, so they would have received benefits for a short period
of time," she said.
"It could even have been my father, because my mother died when I was 9, so he might have received benefits from her.
"They said, 'Well, that must have been it.' But they couldn't tell me for sure. They said they didn't have any details.
"They said all they could do is take a request to have somebody contact me and send me more information.
"I thought, 'This is insane! How could people do that? And this is our government!' "
When
the SSA announced that it was suspending the seizure program, the
agency directed Frost and other taxpayers to visit a field office and
request a waiver for the overpayment.
Frost said she went to the SSA office in Florence on Good Friday, April 18th.
"They
checked the records and told me it was an overpayment to my father when
I was a minor, so I'm eligible for a waiver," she said. "They gave me a
list of things I'm supposed to turn in, and if they determine I'm not
able to afford the overpayment, they will waive it."
Talk about government red tape.
The
SSA wants to see Frost's rent or mortgage payments, utilities, loans
and credit card payments, medical and dental payments, insurance,
property taxes and other fees and obligations, she said.
Before she left the office, the staffer gave her a list of local attorneys, she said.
She said she's thinking about calling one.
"We're
not talking about that much money, and they'd probably decide I'm able
to afford it. But I don't make that much and I just got downsized from
Avon after 17 years," Frost said.
"It doesn't seem fair for the
government to penalize me for something that happened when I was a
minor, that I was not a part of."
She said the government did not seize her brother's or sister's tax refunds - only hers.
The Social Security Administration says it has identified about 400,000 people with old debts. They owe a total of $714 million.
So far, the agency says it has collected $55 million.
There
used to be a 10-year limit on collecting old debts, but thanks to an
unidentified legislator who slipped a rider into the 2008 farm bill, the
government can legally recover any overpayment, even from 40 years ago.
"It's totally nuts," Frost said.
CNBC (Apr 11, 2014)
US seizing tax refunds of children over parents' debt?!
Friday, 11 Apr 2014
The government is now going through old
records to see if it overpaid people on
Social Security. If it thinks it
did, it can now seize the IRS tax refund checks of the CHILDREN of
those people it thinks it overpaid.
This isn't a proposal—it's already happening. For the past three years, the government has been confiscating hundreds of thousands of Americans' tax refunds, according to the Washington Post. It has already confiscated $1.9 billion in tax refunds this year alone.
Peter Zander | Workbook Stock | Getty Images
The amazing thing is that the government
is doing this even if it has little or no proof and no exact details.
And the letters the government sends to unsuspecting taxpayers are
frightening, use accusatory language, and include other financial
threats.
"They gave me no notice,
they can't prove that I received any overpayment, and they use
intimidation tactics, threatening to report this to the credit bureaus,"
Mary Grice, who had her tax refunds seized a few weeks ago, is quoted
as saying.
As
usual, no one in the government is willing to take the responsibility
for this new policy—Social Security said it didn't do it, ask the
Treasury Department. Treasury said—ask Congress.
If you think this is some kind of unprecedented outrage, you're right. But here's some advice: get used to it.
Tax refunds are clearly becoming the new
promised land for government regulators and bureaucrats desperate for
more revenues.
We already know that confiscating tax refunds are the
only real way the IRS will be able to impose Obamacare non-compliance penalties, and now it seems like the
Social Security Administration is jumping on that bandwagon.
But
there's a more powerful and disturbing message here. Remember that the
people who benefited from these alleged Social Security payments have
not committed any crime—that's why the government doesn't need to
provide any proof or real documentation. It's more likely that the SSA
simply screwed up and expects the descendants of its accidental
beneficiaries to pay up. And again, the money comes out first before you
can protest and find out why.
So,
now we have yet another very good reason to make sure you don't get a
tax refund. First, getting a tax refund means you've given the
government a free loan for 12 months.
Second,
tax refunds are the only way you can be punished—rightly or wrongly—for
any ObamaCare (Affordable Care Act) individual mandate non-compliance. And third, your tax refund
is now a possible target for government bureaucrats who screwed up in
the past and want to come after your money to make it right. If the SSA
can do it, what's to stop the other agencies?
After hearing this story, you wouldn't
think anyone would have to remind the public that
Washington already
controls too much of their money and has trampled on too much of our
financial rights. But I will anyway since so many
politicians and other
elites don't seem to be backing down on their incessant calls for more
regulations, oversight and of course, more taxes.
Once again, we have a case of the government saying: "When you screw up, you pay. When we screw up, you also pay."
If only our elected leaders would be so honest with us at election time.
This is commentary from Jake Novak, the supervising producer of "Street Signs."
House
Ways and Means Oversight Subcommittee Chairman
Rep. Charles Boustany
(R-La.) and Social Security Subcommittee Chairman
Rep. Sam Johnson
(R-Texas) recently sought answers about the Treasury Department’s Offset
Program and its effects on children who once received Social Security
benefits.
Boustany and Johnson wrote to
Treasury Secretary Jack Lew and
acting
Social Security Administration Commissioner Carolyn Colvin about recent
reports that adults who may have once received Social Security benefits
as children had their
tax refunds withheld for overpayments made decades
ago to their parents.
The parents of some of the affected citizens are
deceased and many of
the taxpayers
never received notice that they owed a debt
as provided
under law.
Colvin announced last week that the
SSA would
stop additional
referrals of debts to the Treasury Department owed to Social Security
that are
10 years or older for collection under the Treasury Offset
Program.
“SSA’s decision to stop referrals was the right thing to do,”
Boustany and Johnson said. “However, Treasury and
Social Security still
owe an explanation to the American people. While the government must
protect taxpayer dollars,
it is difficult to justify the practice of
seizing innocent Americans’ tax refunds to pay debts resulting from
benefits they may or may not have received when they were children, with
little or
no notice or evidence documenting the overpayment. The sooner
we have those answers the sooner we can work
to protect Americans from
agency actions that are harsh and unfair.”
The Washington Post reported on April 10 that the Treasury has
intercepted $1.9 billion in tax refunds this year, including $75 million
of delinquent debts 10 years of age or older. Additionally, 400,000
taxpayers who owe a total of $714 million in debts more than 10 years
old have been identified by SSA.
Mary Grice has gotten accustomed
to receiving surprises in the mail from the federal government. A few
weeks ago, Uncle Sam seized her state and federal tax refunds to satisfy
a debt it says she owes because someone in her family got an
overpayment from Social Security 37 years ago.
Then, on Saturday afternoon, she got another envelope from the
U.S. government, this time a check for the $2,996 that Social Security
had said she owed.
The Treasury has intercepted millions in tax refunds, often
without notice or proof that money is owed.
“I was, like, wow, they’ve given back everything they took from
me,” said Grice, who lives in Takoma Park. “But I wonder, does this
mean they just want me to quiet down or does it mean they are returning
everyone’s money?”
Hundreds of thousands of Americans have that
same question now, after
Social Security’s acting commissioner last week
ordered the agency to cease collecting on debts that are more than 10
years old. That order followed a
Washington Post report
detailing how
the government is confiscating tax refunds to pay off old
debts that, in many cases, the taxpayer never knew existed.
But a week after Commissioner Carolyn Colvin
froze collections to
give the agency time for “a thorough review of our responsibility and
discretion,” many taxpayers say the government is still seizing refunds.
Clifton
Bowie, a civilian employee of the Navy who lives in St. Mary’s County
in southern Maryland, also received a letter on Saturday, but his was
the opposite of Grice’s: “
They took $33, saying there was an overpayment
to my father,” Bowie said. “But he died in 1985 and we never got any
notice of any overpayment.”
Bowie said he wouldn’t object to
paying if the government could show how and when an error was made, but
he said Social Security was unable to provide evidence of the debt.
“If
you’re going to take money that I owe society, fine,” Bowie said, “but
it reeks of underhandedness when they reach into your tax refund and
they can’t explain what you owe the money for.”
For taxpayers
whose refunds already have been seized, the agency said Monday, “no
decision has been made regarding whether those individuals . . . would be refunded the payment” unless they can prove they did not receive any notice of the debt.
LaVenia
LaVelle, a Social Security spokeswoman, said in a written statement
that letters like the one Bowie received went out before Colvin’s order
to stop them last week.
“We believe that the overpayments of the
individuals receiving notices in the last few days had already been
referred to Treasury, were already in the pipeline for processing, and
the processing of those cases could not be stopped,” LaVelle wrote.
Social
Security officials say they are not holding taxpayers accountable for
their parents’ debts, but in many of the cases,
the adult children of deceased parents are losing refunds even though
they never received benefits of their own.
Bowie, for example,
said he never received direct benefits; rather, his mother, who died in
1996, got survivor’s benefits after his father died. Why the government
is now collecting from Bowie, rather than any of his nine siblings, is a
mystery to him.
Social Security, which refuses to discuss
individual cases even with the taxpayer’s permission, said it seeks
payment from surviving children in birth order. Many of the cases The
Post has examined involve taxpayers whose refunds were taken even though
older siblings were untouched by the collection effort.
In Alan
Friedgood’s case, the government last week seized $350 from his tax
refund — and from his twin sister’s as well — because the pair’s mother,
who died in October, had received a one-month overpayment of benefits
in 1975.
“They say they sent her one too many checks” after the
death of his father, said Friedgood, who lives in San Rafael, Calif.
“They’re just figuring this out 40 years later? It sounds like they’re
broke and looking to find money whatever way they can.”
Friedgood’s
father died when he was 12, and he said the twins never received direct
benefits. “
If she owed it, she owed it,” he said, “but for them to come
after this out of the blue after 40 years is crazy.”
The
enforcement effort on old debts stems from a change slipped into the
2008 farm bill, lifting the statute of limitations that prohibited the
government from going after debts that were more than 10 years old.
Social Security says it has 400,000 old debts to collect, totalling
about $714 million.
Although Grice was pleased to get her money
back, she said the matter will not be resolved until the government
reinstates the statute of limitations on old debts.
The statement
from Social Security said that “
while referral of cases to Treasury have
been halted, there has been no change in policy pending the agency’s
review.”
Grice’s attorney, Robert Vogel, who filed suit in federal
court in Greenbelt two weeks ago arguing that the government denied
Grice due process by taking her refund without notice, said he has not
yet determined how the return of her refund will affect the lawsuit.
“
We’re
very gratified they reacted so quickly and we hope they act as quickly
with respect to the thousands of other Americans who are in Mary’s
position,” Vogel said.
“It’s really very sad: The class of people
affected by this policy can be defined as people who lost a parent at an
early age.”
Christina Edwards of Los Angeles was 15 when her
father died. Her family received survivors’ benefits until Edwards and
her three siblings turned 18 or finished college. On Saturday, Edwards
got a notice saying her $1,760 tax refund had been sent to Social
Security to cover an overpayment made 28 years ago. None of her
siblings’ refunds have been confiscated, she said.
Edwards, 52, said she needed the refund “to buy my mother her insulin this month, which is $600.”
Social
Security officials said people whose refunds are still being taken may
appeal their cases. Edwards, whose refund was also intercepted last
year, did appeal, and like 90 percent of those who do, she was denied.
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House
Ways and Means Oversight Subcommittee Chairman
Rep. Charles Boustany
(R-La.) and Social Security Subcommittee Chairman
Rep. Sam Johnson
(R-Texas) recently sought answers about the Treasury Department’s Offset
Program and its effects on children who once received Social Security
benefits.
Boustany and Johnson wrote to
Treasury Secretary Jack Lew and
acting
Social Security Administration Commissioner Carolyn Colvin about recent
reports that adults who may have once received Social Security benefits
as children had their
tax refunds withheld for overpayments made decades
ago to their parents.
The parents of some of the affected citizens are
deceased and many of
the taxpayers
never received notice that they owed a debt
as provided
under law.
Colvin announced last week that the
SSA would
stop additional
referrals of debts to the Treasury Department owed to Social Security
that are
10 years or older for collection under the Treasury Offset
Program.
“SSA’s decision to stop referrals was the right thing to do,”
Boustany and Johnson said. “However, Treasury and
Social Security still
owe an explanation to the American people. While the government must
protect taxpayer dollars,
it is difficult to justify the practice of
seizing innocent Americans’ tax refunds to pay debts resulting from
benefits they may or may not have received when they were children, with
little or
no notice or evidence documenting the overpayment. The sooner
we have those answers the sooner we can work
to protect Americans from
agency actions that are harsh and unfair.”
The Washington Post reported on April 10 that the Treasury has
intercepted $1.9 billion in tax refunds this year, including $75 million
of delinquent debts 10 years of age or older. Additionally, 400,000
taxpayers who owe a total of $714 million in debts more than 10 years
old have been identified by SSA.
]
The
Washington Post today reported on thousands of taxpayers being
deprived of tax refunds
to repay debts incurred by their parents decades ago. It cites the
experience of Mary Grice of Takoma Park, Md., who is suing the Internal
Revenue Service for laying claim to her refund without any record to
substantiate her benefiting from a survivor benefit overpayment on her
father's social security account in 1977. Grice was one of five children
who along with her father's first wife received survivor benefits on
the account. The other surviving children have not been targeted by IRS.
In recent years, the news has included stories of taxpayers whose
refunds were offset to pay child support, or delinquent student loan
debtors whose refunds were applied to their outstanding balances. Only
since 2011 has
IRS
reached even further, grabbing up tax refunds to pay debts that were
once considered time-barred and debts incurred by the taxpayer's
parents.
Are you at risk of receiving a dreaded IRS offset
letter instead of a refund check based on a family member's debt? Here's
what you need to know:
*In 2008, Congress included language
removing the statute of limitations on debts owed the government in a
farm bill. Under the authority of
section 14219
of P.L. 100-246, IRS is authorized to enforce any debt outstanding on
or after the passage of the law, provided the offset is not otherwise
barred by statute for the particular type of debt.
*IRS began an aggressive campaign to collect on old debts in about 2011, according to the Washington Post.
*The farm bill does not grant IRS authority to offset refunds for
debts owed by family members; the cases that have made the news involved
social security survivor's benefits, at least putatively paid in part
for the benefit of the taxpayer whose refund was offset.
*Social
Security Administration record-keeping deficiencies have frustrated
some alleged debtors into foregoing any challenge to the confiscation,
the Post explained.
*Taxpayers who challenge the IRS offset may
be able to get their money back. The absence of records proving the
debts actually belong to the party subject to offset can lead to
reversal, as happened with Alice Palatnick.
NBC 4 New York described how Alice Palatnick, originally dinged for a 44-year-old debt ultimately got her
$3,764 returned to her when its I-Team investigated.
*Grice's attorney, Robert Vogel, questions the legality of the
underlying legislation being interpreted to reinstate debts already
time-barred when the legislation passed.
Manhattan
tax attorney John Genova told NBC4 New York regardless of the statute
of limitations issue, a taxpayer is entitled to notice, an opportunity
to dispute a debt, and the opportunity to pay a debt over time.
The
Washington Post today reported on thousands of taxpayers being
deprived of tax refunds
to repay debts incurred by their parents decades ago. It cites the
experience of Mary Grice of Takoma Park, Md., who is suing the Internal
Revenue Service for laying claim to her refund without any record to
substantiate her benefiting from a survivor benefit overpayment on her
father's social security account in 1977. Grice was one of five children
who along with her father's first wife received survivor benefits on
the account. The other surviving children have not been targeted by IRS.
In recent years, the news has included stories of taxpayers whose
refunds were offset to pay child support, or delinquent student loan
debtors whose refunds were applied to their outstanding balances. Only
since 2011 has
IRS
reached even further, grabbing up tax refunds to pay debts that were
once considered time-barred and debts incurred by the taxpayer's
parents.
Are you at risk of receiving a dreaded IRS offset
letter instead of a refund check based on a family member's debt? Here's
what you need to know:
*In 2008, Congress included language
removing the statute of limitations on debts owed the government in a
farm bill. Under the authority of
section 14219
of P.L. 100-246, IRS is authorized to enforce any debt outstanding on
or after the passage of the law, provided the offset is not otherwise
barred by statute for the particular type of debt.
*IRS began an aggressive campaign to collect on old debts in about 2011, according to the Washington Post.
*The farm bill does not grant IRS authority to offset refunds for
debts owed by family members; the cases that have made the news involved
social security survivor's benefits, at least putatively paid in part
for the benefit of the taxpayer whose refund was offset.
*Social
Security Administration record-keeping deficiencies have frustrated
some alleged debtors into foregoing any challenge to the confiscation,
the Post explained.
*Taxpayers who challenge the IRS offset may
be able to get their money back. The absence of records proving the
debts actually belong to the party subject to offset can lead to
reversal, as happened with Alice Palatnick.
NBC 4 New York described how Alice Palatnick, originally dinged for a 44-year-old debt ultimately got her
$3,764 returned to her when its I-Team investigated.
*Grice's attorney, Robert Vogel, questions the legality of the
underlying legislation being interpreted to reinstate debts already
time-barred when the legislation passed.
Manhattan
tax attorney John Genova told NBC4 New York regardless of the statute
of limitations issue, a taxpayer is entitled to notice, an opportunity
to dispute a debt, and the opportunity to pay a debt over time.
Read more at
http://wonkette.com/546287/social-security-administration-just-stealing-tax-refunds-at-random-basically#EEjjSRYiL6ybxfER.99
