:huh:
QuoteSocial Security, Treasury target taxpayers for their parents' decades-old debts
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.
When 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.
Across the nation, hundreds of thousands of taxpayers who are expecting refunds this month are instead getting letters like the one Grice got, informing them that because of a debt they never knew about — often a debt incurred by their parents — the government has confiscated their check.
The Treasury Department has intercepted $1.9 billion in tax refunds already this year — $75 million of that on debts delinquent for more than 10 years, said Jeffrey Schramek, assistant commissioner of the department's debt management service. The aggressive effort to collect old debts started three years ago — the result of a single sentence tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.
No one seems eager to take credit for reopening all these long-closed cases. 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.
The only explanation the government provides for suddenly going after decades-old debts comes from Social Security spokeswoman Dorothy Clark: "We have an obligation to current and future Social Security beneficiaries to attempt to recoup money that people received when it was not due."
Since the drive to collect on very old debts began in 2011, the Treasury Department has collected $424 million in debts that were more than 10 years old. Those debts were owed to many federal agencies, but the one that has many Americans howling this tax season is the Social Security Administration, which has found 400,000 taxpayers who collectively owe $714 million on debts more than 10 years old. The agency expects to have begun proceedings against all of those people by this 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."
Grice filed suit against the Social Security Administration in federal court in Greenbelt this week, alleging that the government violated her right to due process by holding her responsible for a $2,996 debt supposedly incurred under her father's Social Security number.
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.
http://www.washingtonpost.com/politics/social-security-treasury-target-hundreds-of-thousands-of-taxpayers-for-parents-old-debts/2014/04/10/74ac8eae-bf4d-11e3-bcec-b71ee10e9bc3_story.html
Can't collect on Teabagger cattle ranchers, gotta make up the difference somehow.
Quote from: CountDeMoney on April 13, 2014, 11:22:16 PM
Can't collect on Teabagger cattle ranchers, gotta make up the difference somehow.
Dont hate.
household receives too much money from social security
years later the mistake is corrected by withholding tax refund from one member of that household
scandal
Oh I am so screwed. :(
Ah, Washington Post, in the pocket of one of the richest people alive.
Jeff Bezos. Your agenda is well-known.
Quote from: LaCroix on April 13, 2014, 11:50:34 PM
household receives too much money from social security
years later the mistake is corrected by withholding tax refund from one member of that household
scandal
Somebody (no one knows who, because Feds didn't document)) receives too much money from the Feds. Thirty-seven years later, Feds arbitrarily pick eldest child of some dead guy to repay debt. Scandal.
LaCroix doesn't get it. No scandal there.
QuoteNow, 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.
Unreal. I heard this on the news last week. Also mentioned was how Congress let lapse the 10 year liability on things like this, old debts, and now IRS can chase you down forever. The IRS makes many mistakes, plus people trying to keep such old records, just opens up a whole lot of room for abuse.
I know people who've had nervous breakdowns working for the IRS. It's a pretty messed up place.
Quote from: grumbler on April 14, 2014, 06:50:19 AMSomebody (no one knows who, because Feds didn't document)) receives too much money from the Feds. Thirty-seven years later, Feds arbitrarily pick eldest child of some dead guy to repay debt. Scandal.
LaCroix doesn't get it. No scandal there.
from a legal standpoint, the issue does not appear to be (at least at this time) that the Feds should not have withheld a tax refund from a woman, due to an overcharge, who directly/indirectly benefited from her father's social security
the issue, as the attorney indicated, appears to be a potential constitutionality issue regarding a "retroactive lifting of the 10-year limit on debt collection"
Quote from: Darth Wagtaros on April 14, 2014, 07:21:09 AM
I know people who've had nervous breakdowns working for the IRS. It's a pretty messed up place.
Worrying about truck bombs and airplanes crashing into your break room will do that.
Quote from: LaCroix on April 14, 2014, 07:54:29 AM
from a legal standpoint, the issue does not appear to be (at least at this time) that the Feds should not have withheld a tax refund from a woman, due to an overcharge, who directly/indirectly benefited from her father's social security
Unless there was an inheritance, I don't see how you can assume this. We don't know how the parents spent the money.
Quotethe issue, as the attorney indicated, appears to be a potential constitutionality issue regarding a "retroactive lifting of the 10-year limit on debt collection"
How is this a constitutional issue?
I hope those grannies who blow their whole SS check on slots in Vegas will think twice from now on :mad:
Quote from: grumbler on April 14, 2014, 06:50:19 AM
Quote from: LaCroix on April 13, 2014, 11:50:34 PM
household receives too much money from social security
years later the mistake is corrected by withholding tax refund from one member of that household
scandal
Somebody (no one knows who, because Feds didn't document)) receives too much money from the Feds. Thirty-seven years later, Feds arbitrarily pick eldest child of some dead guy to repay debt. Scandal.
LaCroix doesn't get it. No scandal there.
Presumably she never received a cheque made out in her name for these benefits. And being a child* at the time wasn't she below the age of legal responsibility ?
*at what age do you become liable for debt,when can you legally sign a consumer credit deal for instance?
How can you be liable for the debt of your dead parent? Is it because of sharing the same SS number when she was young? Looks fucked up to me.
Quote from: celedhring on April 14, 2014, 08:38:17 AM
How can you be liable for the debt of your dead parent? Is it because of sharing the same SS number when she was young? Looks fucked up to me.
Like this apparently. Though generally I think you are liable for the debts of your parents if they die with debts right? Of course this is a bit different, as this was not a debt but rather collection on an overpayment.
Quote from: Valmy on April 14, 2014, 08:40:43 AM
Though generally I think you are liable for the debts of your parents if they die with debts right?
Pretty sure this is not true.
Quote from: Admiral Yi on April 14, 2014, 08:45:39 AM
Quote from: Valmy on April 14, 2014, 08:40:43 AM
Though generally I think you are liable for the debts of your parents if they die with debts right?
Pretty sure this is not true.
Yes, otherwise bits of America would be feudal or look like modern India.
Quote from: Admiral Yi on April 14, 2014, 08:45:39 AM
Pretty sure this is not true.
Then why do we get life insurance to help with final expenses if all of our debts get cancelled? Why not just get credit cards under your parents names and run them up prior to their death knowing you get to keep it all for free? That cannot be true or it would be the most easily abusable thing in the world.
Quote from: Admiral Yi on April 14, 2014, 08:45:39 AM
Quote from: Valmy on April 14, 2014, 08:40:43 AM
Though generally I think you are liable for the debts of your parents if they die with debts right?
Pretty sure this is not true.
I am quite sure that this is not true. The estate can owe debts, but the children do not. They simply inherit less and , if the estate is insolvent, they will get nothing.
Quote from: Valmy on April 14, 2014, 08:52:22 AM
Then why do we get life insurance to help with final expenses if all of our debts get cancelled?
:huh: No one is arguing that "all of our debts get cancelled." Jesus, dude! Talk about strawman arguments!
QuoteWhy not just get credit cards under your parents names and run them up prior to their death knowing you get to keep it all for free? That cannot be true or it would be the most easily abusable thing in the world.
If you use your parents' credit cards without permission, this is fraud. If you use them with permission, this would be gift-giving and subject to taxes, beyond certain limits. The estate would owe the credit card companies or banks for the balance owed. Not sure what you mean about something being "the most easily abused thing in the world."
Quote from: grumbler on April 14, 2014, 08:54:14 AM
I am quite sure that this is not true. The estate can owe debts, but the children do not. They simply inherit less and , if the estate is insolvent, they will get nothing.
Yeah ok this was more what I was thinking of. So in the event you inherit something you are liable for any debts later discovered then yes? That would be the only way this IRS thing would even remotely reasonable.
Quote from: Valmy on April 14, 2014, 09:00:12 AM
Quote from: grumbler on April 14, 2014, 08:54:14 AM
I am quite sure that this is not true. The estate can owe debts, but the children do not. They simply inherit less and , if the estate is insolvent, they will get nothing.
Yeah ok this was more what I was thinking of. So in the event you inherit something you are liable for any debts later discovered then yes? That would be the only way this IRS thing would even remotely reasonable.
But the estate of the dead person will in all probability have been wound up years ago.
The state didn't present the debt to the executor of estate at the time, so it went 'unpaid' so to speak.
Generally you can't directly inherit until the estate closes, and the estate isn't supposed to close until all debts are settled. Obviously if the estate owes more than it owns, it's similar to bankruptcy in that creditors get pennies on the dollar in a standardized form of prioritization.
There is actually a window of time during which creditors have to be allowed to come forward and say that the deceased owed them money. I actually believe if you guide the estate properly through the process and by the book, once it is closed the creditors have "missed their window" and it's basically tough luck if they discover five years later they should have gone after that estate for unpaid debts.
Some assets sort of bypass the estate process though, which is where things start to get complicated.
The primary reason for life insurance is basically to guarantee your heirs have money. Usually the policy will be for enough that it will pay off all your estate's expected debts and then leave a healthy remainder. If you're an older person with grown children you probably only want enough life insurance to cover your debts + pay for a funeral. If you have dependents you want enough to cover your debts + basically replace your earnings for the rest of the dependent's minority. If you have a spouse things are different, as a lot of assets will be marital assets and immediately devolve to the spouse anyway, separate from any estate process. There also usually own't be any need to immediately settle debts, your spouse will have probably been a joint debtor and will just continue making those payments. Life insurance is one of those assets that would often not be part of an estate, because it has a specific named beneficiary. So your named beneficiary receives the payment immediately upon verification of death, so it is not part of probate. But depending on how you set the beneficiaries up, the life insurance payment could in fact go to your estate instead.
Also with the IRS and very old tax issues, I assume it can go both ways and that they're just as likely to give money owed or overpaid from thirty years ago. And the assumption can't be made that either oweing or being owed money is correct, as the IRS makes plenty of mistakes too.
I don't understand the debt elimination rationale for life insurance Biscuit. Since debt is not heritable, you're paying to eliminate nonexistant downside risk.
Isn't this part of the issue where, if you accept an inheritance, you accept the according outstanding debts of the estate? (With the exception that you can take a decent amount of household goods, heirlooms, sentimental things, etc. without being on the hook for the debts.) I know virtually nothing about this, of course, but recall some basic principle to this effect.
Quote from: Admiral Yi on April 14, 2014, 09:24:57 AM
I don't understand the debt elimination rationale for life insurance Biscuit. Since debt is not heritable, you're paying to eliminate nonexistant downside risk.
Ex, an employee of mine is a first generation Vietnamese immigrant who (in that quaint Asian way) bought a house for her parents when she graduated college that is in her name. She later got married and doesn't live in the house, but still owns it and makes payments. Her parents are unable to read/speak English and are living off of small social security checks at this point (after working as part timers in minimum wage jobs.) So basically she has enough life insurance to guarantee that the house can be paid off when she dies as her parents would otherwise have to move. Lacking any English ability they'd have a difficult time even working that out with their only English speaking relative deceased, and they also are elderly and wouldn't want to be relocated. The house will be part of the estate as real property, and if the estate can't cover the mortgage the parents would be evicted at some point.
Also most people that have big life insurance policies are married with dependents. Most households are dual income, if you die you will want your spouse to have enough money to either eliminate or at least pay down debts that were incurred with the understanding you would be able to use both of your incomes to make payments on them.
Quote from: OttoVonBismarck on April 14, 2014, 09:13:49 AM
Generally you can't directly inherit until the estate closes, and the estate isn't supposed to close until all debts are settled. Obviously if the estate owes more than it owns, it's similar to bankruptcy in that creditors get pennies on the dollar in a standardized form of prioritization.
There is actually a window of time during which creditors have to be allowed to come forward and say that the deceased owed them money. I actually believe if you guide the estate properly through the process and by the book, once it is closed the creditors have "missed their window" and it's basically tough luck if they discover five years later they should have gone after that estate for unpaid debts.
This is correct. The executor of the estate has to announce in the papers that the deceased is gone and that anyone who wants to pursue a claim against the estate needs to file such a claim with the executor. How long they have to file, and what and how many papers have to have the public notice, are determined by state laws (like all things to do with estates).
Federal law trumps state law, though, so i don't think the IRS is bound by the limits imposed by state law.
By the same token, though, federal law is bound by constitutional limits, and the IRS cannot deprive anyone of property without due process of law. How simply seizing tax refunds in the absence of due process escapes being unconstitutional, I don't know. I suspect one of out law-talkers can explain it.
In any case, it is an excellent argument for making sure you receive little or nothing in the way of tax returns. So long as you make sure you deduct in a given year an amount equal to what you owed in taxes the previous year, you will avoid penalties, and generally have a very small payment owed. The IRS cannot seize a refund that does not exist.
I have buried coffee cans full of silver coins for my family to dig up.
Quote from: 11B4V on April 13, 2014, 11:31:19 PM
Quote from: CountDeMoney on April 13, 2014, 11:22:16 PM
Can't collect on Teabagger cattle ranchers, gotta make up the difference somehow.
Dont hate The Department of the Interior
Fixed.
Quote from: grumbler on April 14, 2014, 09:44:00 AM
By the same token, though, federal law is bound by constitutional limits, and the IRS cannot deprive anyone of property without due process of law. How simply seizing tax refunds in the absence of due process escapes being unconstitutional, I don't know. I suspect one of out law-talkers can explain it.
From the article, it appears that the IRS is receiving a certification from a sister federal agency saying that a debt is owed.
Quote from: Admiral Yi on April 14, 2014, 08:18:54 AM
Quote from: LaCroix on April 14, 2014, 07:54:29 AM
from a legal standpoint, the issue does not appear to be (at least at this time) that the Feds should not have withheld a tax refund from a woman, due to an overcharge, who directly/indirectly benefited from her father's social security
Unless there was an inheritance, I don't see how you can assume this. We don't know how the parents spent the money.
Quotethe issue, as the attorney indicated, appears to be a potential constitutionality issue regarding a "retroactive lifting of the 10-year limit on debt collection"
How is this a constitutional issue?
Ex post facto law.
Quote from: Ed Anger on April 14, 2014, 11:04:32 AM
I have buried coffee cans full of silver coins for my family to dig up.
Best way to go. No lawyers involved. :P
Quote from: Ed Anger on April 14, 2014, 11:04:32 AM
I have buried coffee cans full of silver coins for my family to dig up.
Ah, Antisocial Security.
Quote from: MadImmortalMan on April 14, 2014, 01:19:33 PM
Quote from: Ed Anger on April 14, 2014, 11:04:32 AM
I have buried coffee cans full of silver coins for my family to dig up.
Best way to go. No lawyers involved. :P
:cry:
Quote from: Scipio on April 14, 2014, 12:59:32 PM
Ex post facto law.
I don't see any criminal penalties associated with this...
Quote from: Norgy on April 14, 2014, 01:51:34 PM
Quote from: Ed Anger on April 14, 2014, 11:04:32 AM
I have buried coffee cans full of silver coins for my family to dig up.
Ah, Antisocial Security.
:lol:
Quote from: Capetan Mihali on April 14, 2014, 03:19:57 PM
Quote from: Scipio on April 14, 2014, 12:59:32 PM
Ex post facto law.
I don't see any criminal penalties associated with this...
I don't see how it is a prohibited ex post facto law either.
Quote from: Norgy on April 14, 2014, 01:51:34 PM
Quote from: Ed Anger on April 14, 2014, 11:04:32 AM
I have buried coffee cans full of silver coins for my family to dig up.
Ah, Antisocial Security.
:lol:
Quote from: mongers on April 14, 2014, 08:21:51 AM
Quote from: grumbler on April 14, 2014, 06:50:19 AM
Quote from: LaCroix on April 13, 2014, 11:50:34 PM
household receives too much money from social security
years later the mistake is corrected by withholding tax refund from one member of that household
scandal
Somebody (no one knows who, because Feds didn't document)) receives too much money from the Feds. Thirty-seven years later, Feds arbitrarily pick eldest child of some dead guy to repay debt. Scandal.
LaCroix doesn't get it. No scandal there.
Presumably she never received a cheque made out in her name for these benefits. And being a child* at the time wasn't she below the age of legal responsibility ?
*at what age do you become liable for debt,when can you legally sign a consumer credit deal for instance?
She was 21 in 1977 when the alleged overpayment occurred. At the time, a child could continue to receive SS survivors' or dependents' benefits through age 21 if they remained a full-time student. Up to age 18 IIRC the checks come to the parents or guardians, but from age 18 to age 21 the check came to the child, in the child's name.
The Supreme Court has generally ruled that the prohibition on
ex post facto laws applies to criminal law; as Capetan Mihali and grumbler have pointed out, no one appears to be charged with a crime here, so
ex post facto issues aren't involved. Due process issues seem to arise from at least 2 problems--the IRS should have to prove (and the alleged debtor have an opportunity to disprove) that there actually was an overpayment, and possibly more importantly, prove that the overpayment was actually made to the person from whom it is collecting the debt.
I saw on the news that this program is being suspended due to complaints from people and Congress members. Interesting...