Shakedown: Treasury now seizing tax refunds from adult children to pay parents’ decades-old Social Security debts

posted at 3:21 pm on April 11, 2014 by Allahpundit

When I say “debts,” I don’t mean loans that the parents willingly sought from SSA. It would be bad enough to hold a kid responsible for that (since when are children responsible for their parents’ obligations?), but at least it would have been voluntarily incurred by mom/dad. The “debts” here are overpayments of Social Security benefits, the product of SSA’s own errors. The parents who received them might not have even realized they were getting money they weren’t supposed to have. And now, somehow, it’s junior’s problem.

But wait. It gets worse.

When [Mary] 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. After 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…

“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.”

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.

SSA insists that they did send notice — to a P.O. Box that Grice hasn’t owned for 35 years, even though they have her current address.

How can they demand restitution for a mistaken payment made in the late 1970s, let alone from someone who didn’t even receive it? Because: The farm bill that passed in 2011 lifted the 10-year statute of limitations on debts owed to the feds. Treasury has collected more than $400 million since then on very old obligations, many of them below the radar of public scrutiny because the amounts are often small enough, i.e. a few hundred dollars, that the targets find it’s cheaper to pay up than to fight. It’s a shakedown, based on the flawed assumption that a child not only must have benefited from the overpayment to his parent but that he/she received the entirety of the benefit, with little proof offered that the debt even exists. (One man who was forced to pay demanded a receipt from SSA affirming that his balance was now zero. The SSA clerk told him he’d put in the request but that the man shouldn’t expect to receive anything.) The only reason you’re hearing about Grice’s case, I think, is because they went after her for thousands, not hundreds, of dollars, which was enough of a hit to make her get a lawyer. Turns out that the feds had seized and then continued to hold her federal and state refunds, an amount greater than $4,400 — even though they were only demanding $2,996 from her to pay off her father’s debt. Lo and behold, once WaPo found out and started asking questions, the $1,400 excess was promptly returned to her. Amazing how fast bureaucracy can move when someone looks behind the curtain.

The whole thing is Kafkaesque — opaque, oppressive, arbitrary, and sinister in its indifference to making sure the right person pays so long as someone does. After reading the story, it’s not obvious to me what’s stopping Treasury from demanding a payment from every taxpayer whose parents are dead. If the chief witnesses are gone and the feds don’t have to prove that a child actually received any benefits from overpayment, the only “check” on this process is SSA’s willingness to tell the truth about who owes them money and how much. You trust them, don’t you?

Exit question from Karl: Isn’t holding children responsible for their parents’ retirement debts the governing model of the Democratic Party?

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Isn’t this a little bit ILLEGAL? How can you transfer someone’s debt onto another person? Where does it stop? If the kids don’t have the money do you go after brothers / sisters, the nephews / nieces? This is tyrannical , Socialist B$!

easyt65 on April 13, 2014 at 9:32 AM

I keep hearing about how awful & unconstitutional this ex post-facto revision of a law is, especially since it was done in such a sneaky untraceable way to politicians responsible. So are any lawmakers trying to stop this? Certainly spread your wealth Obama won’t interfere.

What more proof do we need of a corrupt government.

Chessplayer on April 13, 2014 at 11:28 AM

This is insanity!

But then again it’s the IRS and so is anyone surprised?

And the politicians didn’t know what was in the farm bill because they didn’t read it. Just like they didn’t read the Obamacare bill. Just like they don’t read any other bill over five pages in length. They just let the aids, staffers, and lobbyist write the bill for them and then they have to pass the so we (and they) can find out what’s in them.

This government is way out of control and only We The People can turn it around at the ballot box; because the politicians are not going to do it on their own.

BMF on April 13, 2014 at 12:30 PM

funny how children of illegal aliens can’t be held responsible for the actions of their parents and should be given special benefits yet the Feds can do this.

nacho475 on April 14, 2014 at 11:19 AM

Meanwhile IRS VOLUNTARILY and ILLEGALY distributes payments to “acts of love” to the tune of $4 Billion per year. And counting. Time to send Mexico the bill and then start confiscating resorts in lieu of payments?

riddick on April 14, 2014 at 9:39 PM

blockquote>funny how children of illegal aliens can’t be held responsible for the actions of their parents and should be given special benefits yet the Feds can do this.

nacho475 on April 14, 2014 at 11:19 AM

Obama himself said that those children who were brought here by their parents should not be punished because their parents broke the law.

How does that fit with going after American citizens, Middle class citizens who actually pay taxes particularly, that decedent children having to pay for a debt that allegedly was caused by over-payment by the government?

How do you fight the IRS when if you try they punish you by seizing all your assets, bank accounts and even paychecks until the case is settled. Better be registered as a democrat before you try. It might help if you donate a large sum of money to their coffers too.

These children grew up here and benefited from our tax dollars if not through well fare then through an education that taxpayer paid. Their parents benefited as well if not through welfare then through earnings that they paid no tax on. Mexico’s second largest source of income is the money sent home by those illegal working here.

If American citizens have to pay for an grandparent or parents debt, those who came here illegaly, even if as a child, should as well pay for their parents and grandparents owed debt in the form of over paid welfare, SSI, SS, and unpaid taxes, before they can become citizens.

That probably will not bring in any money, unless they find some that are actually citizens with illegal parents and grandparents, aunts or uncles, and of course actually paying taxes.

It would however cut back on illegals, or as Obama calls them, undocumented citizens,since they would find it better to avoid paying back the government for money that someone else owes. There would a whole lot less incentive to come here and stay if they did.

This also raises the question of the goverment criminally stealing from American tax payers, not that a little crime is going to worry them. What right do they have to take something that was never theirs to start with and do it because they can. Like the bully who takes other kids lunch money.

Franklyn on April 14, 2014 at 9:50 PM