Treasury Dept. Intercepts Tax Refunds to Collect Debts of Dead Parents

Sunday, April 13, 2014
(photo: Elijah Wallechinsky)

If you’re expecting a refund from the taxes you just filed, beware. The Treasury Department might grab a piece of your money before you ever see it.

 

Thanks to a one-line provision slipped into the 2008 Farm Bill, a 10-year statute of limitations was removed from old debts to the government. The Social Security Administration (SSA) is taking advantage of that, garnishing tax refunds, including from children of people whom the SSA claims were overpaid benefits in the distant past.

 

Mary Grice’s father died in 1960. She, four siblings and her father’s first wife, whom she never knew, received survivors’ benefits, according to The Washington Post. Now, 54 years later, Grice is being held responsible for a $2,996 debt the SSA claims is tied to her father’s Social Security number. Treasury officials say an agency must show evidence of a debt before it can hold up a tax refund. But SSA officials can’t point to any records explaining the debt.

 

Social Security officials say that if children benefitted even indirectly from an overpayment, they’re liable for the debt and the policy is to go after the siblings in birth order to clear it. This doesn’t explain why Treasury went after Grice; she has older and younger siblings, none of whom have been contacted about the debt.

 

Grice filed suit against the SSA last week. And now similar cases have come to light. Brenda and Mike Samonds of Glenarm, Illinois, have been trying to reclaim the $189.10 tax refund the government seized a year ago, claiming that Mike’s mother, who died 33 years ago, had been overpaid on survivor’s benefits after Mike’s father died in 1969.

 

Two senators have joined the call to urge the SSA to stop trying to collect the money from children of debtors. “While this policy of seizing tax refunds to repay decades-old Social Security overpayments might be allowed under the law, it is entirely unjust,” senators Barbara Boxer (D-California) and Barbara A. Mikulski (D-Maryland) wrote to Social Security’s acting commissioner, Carolyn Colvin. “Garnishing taxpayers’ refunds to pay for debts that are more than a decade old—and incurred through no fault of their own—is a policy that cannot be continued in good conscience.”

-Steve Straehley

 

To Learn More:

Social Security, Treasury Target Taxpayers For Their Parents’ Decades-Old Debts (by Marc Fisher, Washington Post)

Senators Ask U.S. To Stop Garnishing Tax Refunds To Pay For Old Debts (by Marc Fisher, Washington Post)

Comments

mike 10 years ago
just happened to me, tried to call s.s. in joliet 6 times in one day, they just wont answer the phone. wrote a leter asking just to explain how i would owe this money, no answer but they took my tax refund before i finshed the process from s.s.
debbie 10 years ago
Social Security did the same thing to me in February of this year.

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