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?