IRS can seize funds from taxpayers to cover 30-year-old debts of their deceased parents

Friday, April 25, 2014 by: J. D. Heyes
Tags: IRS, debt collection, deceased parents

(NaturalNews) In another sign that the U.S. government is desperate for money to finance its bloated operations, Uncle Sam's various federal agencies, including the Internal Revenue Service, have stepped up efforts to go after the children of parents who the government says owe debt.

As reported by the The Washington Post, this collection effort usually takes the form of intercepting tax refunds -- and without prior notice. Most victims of this government money grab have no idea that they -- or in many cases, their parents -- even owed Uncle Sam money, and in a high number of cases, the federal government offers no proof that they do:

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.

'Why they took her money is a mystery'

When Grice was four, back in 1960, her father passed away. That left her mother having to raise five children; until they all turned 18, Sadie Grice received survivor benefits from Social Security, which helped her feed and clothe them.

But now, Social Security is claiming that the agency overpaid someone in the family -- officials aren't sure who -- in 1977. So, 37 years later -- and four years after Sadie Grice passed away -- the federal government is looking for money, and it is taking it from her daughter.

"Why the feds chose to take Mary's money, rather than her surviving siblings', is a mystery," the Post reported.

It is a scenario that is being repeated often, all around the country. Hundreds of thousands of taxpayers who believed they were getting tax refunds this year are instead getting letters -- like the one Grice received -- telling them that their refund is being intercepted over a debt they never knew about and, again like Grice, did not incur themselves.

So far this year alone, the Treasury Department and IRS have intercepted $1.9 billion in tax refunds; $75 million of that from debts that were more than 10 years old, according to Jeffrey Schramek, assistant commissioner of the department's debt management service, the Post reported.

The aggressive collection effort began three years ago, the result of one sentence that was tucked into the 2008 farm bill which did away with the 10-year statute of limitations on old debts to the government.

What's more -- and in typical fashion -- nobody on Capitol Hill wants to raise their hand and take responsibility for the change. The Post reports:

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.

Social Security spokeswoman Dorothy Clark provided the only explanation for Uncle Sam's sudden aggressiveness in resolving decades-old debts: "We have an obligation to current and future Social Security beneficiaries to attempt to recoup money that people received when it was not due."

'There is no way most people keep records that long'

The drive to collect these debts began in earnest in 2011; since then, the Treasury Department has collected some $424 million in debts more than a decade old. Those were owed, supposedly, to a number of federal agencies, but the one that has most Americans upset this tax season is the Social Security Administration. It has found about 400,000 taxpayers who supposedly owe a collective $714 million on debts that are more than 10 years old. What's more, the agency says it expects to begin proceedings against all of those people by 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."

She has filed suit against the SSA in federal court, alleging that the government violated her right to due process by holding her solely responsible for a $2,996 debt that was allegedly incurred under her father's Social Security number.

In other words, without notice and for a debt that was not hers, the government had her refund seized anyway, CBS News reported.

Robert Vogel, her lawyer, has sued to demand the government end these kinds of collections.

"The government should not be in the business of trying to collect 30-year-old debts from people," Vogel said. "There is no way that people have any reason to keep their records for that long."

Sources:

http://www.cbsnews.com

http://www.washingtonpost.com

http://hotair.com