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.
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.
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 collect 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 told 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)
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.
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.
"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?
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?
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, and Social Security Subcommittee Chairman Rep. Sam Johnson seek answers on Treasury debt recovery program
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.
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.
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, and Social Security Subcommittee Chairman Rep. Sam Johnson seek answers on Treasury debt recovery program
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.
]
Can IRS Grab Your Tax Refund to Pay Mom or Dad’s Debt?
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.
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.
Published by Carol Bengle Gilbert
Can IRS Grab Your Tax Refund to Pay Mom or Dad’s Debt?
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.
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.
Published by Carol Bengle Gilbert
Read more at http://wonkette.com/546287/social-security-administration-just-stealing-tax-refunds-at-random-basically#EEjjSRYiL6ybxfER.99
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.”
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