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posted by LaminatorX on Tuesday April 15 2014, @04:25PM   Printer-friendly
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: 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.

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  • (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.