Many Americans expecting to see their tax refunds in their bank accounts soon are waking up to a very different scenario: the government actively intercepting their checks in order to pay back debts they’re not responsible for.
According to a new report in the Washington Post, the federal government is seizing nearly $2 billion from hundreds of thousands of taxpayers this year in order to settle debts, some incurred by their parents, some dating back to more than a decade.
This process has been ongoing since 2011, when a revision in the farm bill passed by Congress removed the 10-tear statute of limitations on debts owed to the United States. Since that bill was passed, the government has collected $424 million on debts older than a decade. This year, however, has seen the Social Security Administration (SSA) alone claim that 400,000 Americans owe a total of $714 million in debts older than 10 years.
Multiple government agencies told the Post they were not responsible for pushing for the change, with Social Security spokeswoman Dorothy Clark saying, “We have an obligation to current and future Social Security beneficiaries to attempt to recoup money that people received when it was not due.”
In one case documented by the newspaper, 58-year-old Mary Grice of Maryland discovered her tax refund had been seized by the government to pay for a debt she did not even know existed, and had been incurred under her father’s Social Security number. Her father died in 1960, but her mother – also deceased now – received survivor’s benefits, and the SSA claims it overpaid someone back in 1977 although it is not sure who.
As a result, the agency targeted the oldest sibling – Mary – to pay off the 37-year-old debt. If she was unable to pay it in full, it would have moved down to the next sibling.
“It was a shock,” Grice told the Post. “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.”
Although the Federal Trade Commission’s website states that citizens “typically are not obligated to pay the debts of a deceased relative from their own assets,” the SSA said that if a member indirectly gets assistance from Social Security benefits, their money can be confiscated to repay debts regardless of how old it is.
“While we are responsible for collecting delinquent debts owed to taxpayers, we understand the importance of ensuring that debtors are treated fairly,” the Treasury Department’s Jeffrey Schramek said to the Post.
Treasury officials also stated that before someone’s refund can be seized, evidence of the debt must exist. In Grice’s case, however, SSA officials told the woman that no records existed certifying the debt’s validity.
“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,” Grice’s attorney, Robert Vogel, said. “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 isn’t the only person this is happening to, of course, but she’s lucky in that Vogel decided to take on her case for free. Others who’ve seen their refunds taken – ranging from a few hundred dollars to more than a couple of thousand – cannot afford to mount a legal challenge and therefore don’t. Vogel told the Post he’s very concerned about the statute lifted by Congress.
“Can the government really bring back to life a case that was long dead?” he asked. “Can it really be right to seize a child’s money to satisfy a parent’s debt?”