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posted by LaminatorX on Tuesday April 15 2014, @04:25PM   Printer-friendly [Skip to comment(s)]
from the Sins-of-the-Father-Visited-upon-the-Son dept.

The Washington Post reports that hundreds of thousands of taxpayers who are expecting refunds are instead getting letters informing them that because of a debt they never knew about often a debt incurred by their parents the government has confiscated their check sometimes on debts 20 or 30 years old. For example, 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. "It was a shock," says 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."

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, says 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. The Federal Trade Commission, on its Web site, advises Americans that "family members typically are not obligated to pay the debts of a deceased relative from their own assets." But Social Security officials say that if children indirectly received assistance from public dollars paid to a parent, the children's money can be taken, no matter how long ago any overpayment occurred. Many of the taxpayers whose refunds have been taken say they've been unable to contest the confiscations because of the cost, because Social Security cannot provide records detailing the original overpayment, and because the citizens, following advice from the IRS to keep financial documents for just three years, had long since trashed their own records. More than 1,200 appeals have been filed on the old cases but only about 10 percent of taxpayers have won those appeals. "The government took the money first and then they sent us the letter," says Brenda Samonds.." We could never get one sentence from them explaining why the money was taken."

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  • (Score: 3, Informative) by carguy on Tuesday April 15 2014, @04:34PM

    by carguy (568) on Tuesday April 15 2014, @04:34PM (#31867)

    There was an article in the morning paper today (in USA) which said that this type of collection has been stopped for review.

    The article may be a lame duck, due to the length of the editing queue?

    • (Score: 2) by snick on Tuesday April 15 2014, @04:43PM

      by snick (1408) on Tuesday April 15 2014, @04:43PM (#31873)

      The editing queue is probably backed up because of the 24 hour waiting period before recycling from that other site [slashdot.org]

    • (Score: 5, Informative) by mattie_p on Tuesday April 15 2014, @05:08PM

      by mattie_p (13) on Tuesday April 15 2014, @05:08PM (#31880) Journal

      Actually this story was submitted at 13:35 UTC today [soylentnews.org]. It was accepted by an editor at 14:37 UTC today, and released at 16:25 UTC. This is simply a matter of the submitter and editors not current on all the news. I will note that the article this story is based upon was published on April 10, so the submission was stale before it got to us. Thanks for the clarification, though. The Washington Post (the source for this story) ran an article yesterday [washingtonpost.com] that this was cancelled.

      ~mattie_p

      • (Score: 5, Insightful) by Sir Garlon on Tuesday April 15 2014, @05:55PM

        by Sir Garlon (1264) on Tuesday April 15 2014, @05:55PM (#31896)

        I believe the article is still relevant even though the program has already been suspended. Many Soylent readers are learning about these particular IRS shenanigans for the first time. The fact that the shenanigans happened is kind of illuminating. The fact that the program was suspended shortly after the Washington Post reported on it is even more illuminating. (I speculate but cannot prove the program would not have been suspended if it hadn't made the papers.)

        --
        [Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
        • (Score: 2) by hemocyanin on Tuesday April 15 2014, @07:58PM

          by hemocyanin (186) on Tuesday April 15 2014, @07:58PM (#31964) Journal

          Another thing this story highlights is that this is the result of a single sentence contained in a farm bill.

          W T F

          Obviously, we need a law that says simply, statutory provisions that are not on topic with a specific bill are void and ineffectual from the moment they are added. Farm stuff should go in farm bills. Tax stuff should go in tax bills. Farm-tax issues should go in farm-tax bills. Everything else tacked on should be considered a waste of ink. Making every bill a random hodgepodge of crap, makes it impossible for citizens to monitor and provide input on legislation. The only thing the hodgepodge is good for, is hiding shit.

          • (Score: 2) by mattie_p on Tuesday April 15 2014, @08:39PM

            by mattie_p (13) on Tuesday April 15 2014, @08:39PM (#31979) Journal

            I'm actually looking for that line. Anyone have it yet?

            • (Score: 2) by Sir Garlon on Tuesday April 15 2014, @08:51PM

              by Sir Garlon (1264) on Tuesday April 15 2014, @08:51PM (#31987)

              First article linked from TFS, fifth paragraph:

              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.

              --
              [Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
              • (Score: 2) by mattie_p on Tuesday April 15 2014, @08:55PM

                by mattie_p (13) on Tuesday April 15 2014, @08:55PM (#31990) Journal

                No, I saw that line, I was looking for the line in the farm bill. But I found it. See my other post.

            • (Score: 5, Informative) by mattie_p on Tuesday April 15 2014, @08:54PM

              by mattie_p (13) on Tuesday April 15 2014, @08:54PM (#31988) Journal
              Never mind, found it. They're still breaking the law, though.

              SEC. 14219. Elimination of Statute of Limitations Applicable to Collection of Debt by Administrative Offset.

              (a) Elimination.--Section 3716(e) of title 31, United States Code, is amended to read as follows:

              ''(e)(1) Notwithstanding any other provision of law, regulation, or administrative limitation, no limitation on the period within which an offset may be initiated or taken pursuant to this section shall be effective.

              [[Page 122 STAT. 2245]]

              ''(2) This section does not apply when a statute explicitly prohibits using administrative offset or setoff to collect the claim or type of claim involved.''.

              (b) > Application of Amendment.--The amendment made by subsection (a) shall apply to any debt outstanding on or after the date of the enactment of this Act.

              Note it is an amendment to 31 USC 3716. The first portion of that law reads (emphasis mine):

              (a) After trying to collect a claim from a person under section 3711 (a) of this title, the head of an executive, judicial, or legislative agency may collect the claim by administrative offset. The head of the agency may collect by administrative offset only after giving the debtor--

              (1) written notice of the type and amount of the claim, the intention of the head of the agency to collect the claim by administrative offset, and an explanation of the rights of the debtor under this section;

              (2) an opportunity to inspect and copy the records of the agency related to the claim;

              (3) an opportunity for a review within the agency of the decision of the agency related to the claim; and

              (4) an opportunity to make a written agreement with the head of the agency to repay the amount of the claim.

              It does not appear that the bolded sections have been complied with. Can I get 1% of the profits from the class action suit now?

              • (Score: 3, Interesting) by Reziac on Tuesday April 15 2014, @11:54PM

                by Reziac (2489) on Tuesday April 15 2014, @11:54PM (#32076) Homepage

                I read it a couple days ago, and my first thought was...

                How is this not an ex post facto law?

                Second, aren't they often punishing the innocent, who had fuck-all to do with the debt and ordinarily would not have inherited it?

                But third, I think this was intended for and will be used largely to confiscate desirable real estate from farmers and ranchers, in cases like the current Cliven Bundy flap in Nevada. There's probably not a farm or ranch out there that doesn't have some outstanding federal debt, however small. Which would explain what it's doing in the Farm Bill in the first place.

          • (Score: 2) by Sir Garlon on Tuesday April 15 2014, @08:57PM

            by Sir Garlon (1264) on Tuesday April 15 2014, @08:57PM (#31991)

            Obviously, we need a law that says simply, statutory provisions that are not on topic with a specific bill are void and ineffectual from the moment they are added.

            I agree with you; I wish it could be so. I mentioned that idea in conversation with a lawyer friend of mine, and he had an interesting counterpoint. He said that is essentially equivalent to a line-item veto [wikipedia.org], which sounds good at first until you think about what it does to checks and balances.

            --
            [Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
            • (Score: 2) by hemocyanin on Tuesday April 15 2014, @10:19PM

              by hemocyanin (186) on Tuesday April 15 2014, @10:19PM (#32033) Journal

              It isn't at all like a line item veto.

              1) A line item veto is an affirmative expression by the executive that a particular provision meets his/her disapproval. Making offtopic provisions void says nothing about whether the provision would or would not be vetoed.

              2) A line item veto power is held solely by the executive branch, and the legislative branch doesn't have control over the Executive's pen. Making offtopic provisions void puts the power of creating valid legislation exactly where it belongs -- in the legislature. If the legislature wants to actually pass a law on $topic, it knows exactly how to do it and has the power to do it.

              3) A line item veto infringes on the legislature's power, but creating a hodgepodge bill that can't be vetoed, infringes on executive power -- neither the line item nor the hodgepodge approach respect the traditional checks and balances. Ontopic bills however, would fully respect legislative power and executive power because it doesn't allow the Executive to usurp legislative powers, and it doesn't allow Legislators to hogtie executives with kitchen-sink bills.

          • (Score: 2) by naubol on Tuesday April 15 2014, @09:28PM

            by naubol (1918) on Tuesday April 15 2014, @09:28PM (#32008)

            No, the only obvious thing that it shows is that these off-topic single lines can be widely panned. It does not say whether this sort of thing is for the greater good or if legislatures need this sort of flexibility to do their job in a partisan culture. It could also be a case of addressing the symptom and not the underlying cause.

        • (Score: 2) by HiThere on Tuesday April 15 2014, @08:24PM

          by HiThere (866) on Tuesday April 15 2014, @08:24PM (#31976) Journal

          Also, you only have their word that they've suspended the program. (And suspended doesn't mean canceled.) But since the first notice that anyone gets that the program is operating is that their account has already been debited, there's no evidence that they haven't *already* lifted the suspension.

          This is another government "we're doing this because we can, and you can't stop us" activity proceeding without any "due process"...or, as far as can be determined based on the summary, without any available evidence to the person being "billed"? "fined"? And no evident legal basis for transferring the bill from the (deceased) presumptive debtor to the person that they are taking the money from. (One may exist, but it's not evident.)

          To me this reads as another instance of the govt. saying "We've got the power and you can't stop us." more than anything else. (Did I read the summary correctly that this was a retro-active extension of debt?)

          --
          Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
  • (Score: 4, Insightful) by Blackmoore on Tuesday April 15 2014, @04:34PM

    by Blackmoore (57) on Tuesday April 15 2014, @04:34PM (#31868) Journal

    First they take away bankruptcy as an way to get rid of debt, then they get rid of the time limit to go after it.

    Welcome to indentured servitude.

    • (Score: 1, Interesting) by Anonymous Coward on Tuesday April 15 2014, @10:18PM

      by Anonymous Coward on Tuesday April 15 2014, @10:18PM (#32031)

      Welcome to indentured servitude

      Every 80 years or so, the last guys die who remember how awful the previous catastrophe was and history then repeats itself.
      What is needed is a revitalization of activism as demonstrated by previous generations.
      A worthy go-by would be what happened with Labor during the Great Depression. [wikipedia.org]
      Grab those dangling reins.

      Oh, and you may not be seeing a bunch of dirty hippies gathered in a park near you, but the Occupy movement is NOT dead.
      Like the Freedom Riders portion of the Civil Rights movement of the 1960s, it has simply served its purpose and Occupy has moved on to another of its several phases. [googleusercontent.com] (orig) [dissidentvoice.org]
      There are offshoots doing stuff all over the place [google.com] sponsoring all kinds of events. [dissidentvoice.org]

      Some thoughts from some insightful guys:
      Don't mourn. Organize! --the final words of Joe Hill

      "Power concedes nothing without a demand. It never did and it never will." --Frederick Douglass

      -- gewg_

  • (Score: 2, Informative) by smurd on Tuesday April 15 2014, @04:36PM

    by smurd (1406) on Tuesday April 15 2014, @04:36PM (#31869)
    • (Score: 1) by smurd on Tuesday April 15 2014, @04:41PM

      by smurd (1406) on Tuesday April 15 2014, @04:41PM (#31872)

      Why is there a space char after each "h" in the link? It's not in the URL, it just renders incorrectly in firefox and chrome.

    • (Score: 1) by darkfeline on Tuesday April 15 2014, @07:35PM

      by darkfeline (1030) on Tuesday April 15 2014, @07:35PM (#31944) Homepage

      Right, it's paused because people noticed. If no one spoke up about this, do you think the IRS would say, "Oh, maybe we shouldn't take money from people for our mistake"? This was just one step in the gradual degradation of government and economy that just happened a bit too fast, causing the frog in the pot to croak in surprise. Don't worry, though, they'll make sure to slow down in the future so you won't feel a thing when you're finished boiling.

      --
      Join the SDF Public Access UNIX System today!
  • (Score: 4, Interesting) by DrMag on Tuesday April 15 2014, @04:48PM

    by DrMag (1860) on Tuesday April 15 2014, @04:48PM (#31877)

    When I moved to Maryland as a student, I ran into a problem with my state taxes where I was unaware (from not reading the instructions carefully enough to realize it) that tuition deductions have to be added back in to the AGI in that state. Two years after, I get a letter informing me of the error, and asking not just for the difference in taxes, but also a large sum in interest accrued over the two years (nearly as much as the owed taxes themselves; worst interest rate ever). After an unsuccessful appeal, I had to pay up.

    I can understand that sorting through taxes is as much a pain for the government as it is for us, but it's unacceptable to have such a large delay and then penalize citizens for a situation they didn't even know existed. If nothing else, I sincerely doubt that had I overpaid my taxes that year, that they'd even bother to let me know, let alone add an equivalent amount in interest.

    • (Score: 2, Insightful) by scruffybeard on Tuesday April 15 2014, @05:01PM

      by scruffybeard (533) on Tuesday April 15 2014, @05:01PM (#31878)

      I once got an overpayment refund from VA for about $600 plus interest. I filled out the return incorrectly. They found the error, and initiated the correction on my behalf.

  • (Score: 1, Interesting) by Anonymous Coward on Tuesday April 15 2014, @05:08PM

    by Anonymous Coward on Tuesday April 15 2014, @05:08PM (#31881)

    Same thing happened to me recently for food stamp benefits my family received 11 years ago while I was an undergraduate. Of course, I don't still have paystubs from my minimum wage job from way back then..how was I going to prove that I hadn't been overpaid? Still...I was so poor then, there was no way I had been overpaid.

    So I decided to fight it, and within 2 weeks, I got another letter that said something to the effect of, "whoops. Actually you don't owe us $1,800, just 128.00. Un, hunh. Why should I trust even this reduced amount when it seems its pulling numbers out of it's ass?

  • (Score: 3, Interesting) by VLM on Tuesday April 15 2014, @05:20PM

    by VLM (445) on Tuesday April 15 2014, @05:20PM (#31886)

    I've solved this "problem" by not getting refunds for many years now. Takes a bit of investment income but not as much as you'd think. Carried to an extreme you need to file quarterlies or pay a modest fee/penalty for underpayment, which has happened to me a couple of times. As an anecdote, underpaying by mid $10K for the year resulted in an underpayment penalty of a hundred-something bucks, which I could have avoided by filing quarterlies. I would imagine in those scenarios, they just start garnishing wages and seizing accounts?

    As a side note you'd be surprised how many people simply can't understand a return isn't some kind of credit or reward or welfare handout, it just means you overpaid thru the entire year.

    • (Score: 0) by Anonymous Coward on Tuesday April 15 2014, @06:03PM

      by Anonymous Coward on Tuesday April 15 2014, @06:03PM (#31899)

      I just got back about 14 dollars between state and fed. My roommate was telling me about how he got back some $500 like it's a good thing, but then I pointed your very argument out to him. That kind of killed the conversation.

    • (Score: 2) by starcraftsicko on Tuesday April 15 2014, @06:35PM

      by starcraftsicko (2821) on Tuesday April 15 2014, @06:35PM (#31914) Journal

      I don't advocate actually doing this, but in the current environment for effectively 0% interest at banks (especially for small sums of money), a 0% loan to the government isn't the lunacy it would seem to be. For folks that have trouble finding the financial discipline to "save", it could even make financial sense.

      --
      This post was created with recycled electrons.
      • (Score: 2) by VLM on Tuesday April 15 2014, @07:27PM

        by VLM (445) on Tuesday April 15 2014, @07:27PM (#31938)

        "For folks that have trouble finding the financial discipline to "save", it could even make financial sense."

        Invariably the same crowd where the return money is gone by the end of the week they get it.

        • (Score: 3, Insightful) by starcraftsicko on Tuesday April 15 2014, @08:58PM

          by starcraftsicko (2821) on Tuesday April 15 2014, @08:58PM (#31992) Journal

          Agreed. But it's also the same crowd that mostly never has $2000 in one place to spend via any other means. As a practical matter, it may function more like a 'Christmas club' [wikipedia.org] account than like a retirement/investment account, but there is a value to such things.

          --
          This post was created with recycled electrons.
    • (Score: 1) by GlennC on Tuesday April 15 2014, @06:40PM

      by GlennC (3656) on Tuesday April 15 2014, @06:40PM (#31917)

      I keep trying to explain to my wife that I'd rather not give the Federal government a loan at 0% interest.

      --
      Sorry folks...the world is bigger and more varied than you want it to be. Deal with it.
      • (Score: 0) by Anonymous Coward on Tuesday April 15 2014, @07:18PM

        by Anonymous Coward on Tuesday April 15 2014, @07:18PM (#31933)

        It is amazing the # of people who think it is 'free money' from the gov.

        I ask them ok will you loan me 5000 dollars a 0% interest and when done I want you to fill out this form to get your money back? No is the response every time. Then why do you do it with the state and fed gov? I then show them how to properly fill out their W4. The language on them is deliberately misleading and the cheat sheet is broken to make you think it is the deductions you take on the 1040. They are named the same but are totally different things. For every 1000 you get back add one is a good rule of thumb. Then on your 1040 fill it out to the # of dependents you have, not what is on the W4.

        If you do not use W4 withholding you can also pay your taxes quarterly. W4 withholding just makes it easier to over pay your taxes.

  • (Score: 3, Interesting) by randmcnatt on Tuesday April 15 2014, @06:15PM

    by randmcnatt (671) on Tuesday April 15 2014, @06:15PM (#31905)
    A few years ago I got a tiny refund (all of $16 or so) which the IRS confiscated, supposedly due to debts at the VA medical center here. However, the account number was not MY account number and the VA financial department had no idea what was going on. Never got a decent explanation from the IRS, either.

    Now I wonder if the IRS took my "refund" (it was earned income credit, whoopee) because of some unpaid charge of my father-in-law, who was treated and died in the same facility...and he wasn't my father-in-law when he died. Maybe they were really docking my wife and hit me up because we filed a joint return.
    --
    The Wright brothers were not the first to fly: they were the first to land.
  • (Score: 0) by Anonymous Coward on Tuesday April 15 2014, @11:05PM

    by Anonymous Coward on Tuesday April 15 2014, @11:05PM (#32053)

    Australia has a pay as you go system. Every pay check has tax withheld. At the end of the year most people have little or no tax debt.

    A system for simple tax returns is expected soon.

    • (Score: 1) by urza9814 on Wednesday April 16 2014, @12:32AM

      by urza9814 (3954) on Wednesday April 16 2014, @12:32AM (#32091) Journal

      Yeah, that's how it works in the US too, usually. Taxes get withheld from your paycheck before you ever see it. Then at the end of the year you compare how much was withheld to how much you actually should have paid, and either get a refund or have to pay more.