Seized funds returned to taxpayer, others still lose refunds


Mary Grice, of Takoma Park, Md., talks with her attorney, Robert Vogel, at Vogel’s home in Rockville on April 5. (Evelyn Hockstein/For The Washington Post)

Mary Grice has gotten accustomed to receiving surprises in the mail from the federal government. A few weeks ago, Uncle Sam seized her state and federal tax refunds to satisfy a debt it says she owes because someone in her family got an overpayment from Social Security 37 years ago.

Then, on Saturday afternoon, she got another envelope from the U.S. government, this time a check for the $2,996 that Social Security had said she owed.

“I was, like, wow, they’ve given back everything they took from me,” said Grice, who lives in Takoma Park. “But I wonder, does this mean they just want me to quiet down or does it mean they are returning everyone’s money?”

Hundreds of thousands of Americans have that same question now, after Social Security’s acting commissioner last week ordered the agency to cease collecting on debts that are more than 10 years old. That order followed a Washington Post report detailing how the government is confiscating tax refunds to pay off old debts that, in many cases, the taxpayer never knew existed.

But a week after Commissioner Carolyn Colvin froze collections to give the agency time for “a thorough review of our responsibility and discretion,” many taxpayers say the government is still seizing refunds.

Clifton Bowie, a civilian employee of the Navy who lives in St. Mary’s County in southern Maryland, also received a letter on Saturday, but his was the opposite of Grice’s: “They took $33, saying there was an overpayment to my father,” Bowie said. “But he died in 1985 and we never got any notice of any overpayment.”

Bowie said he wouldn’t object to paying if the government could show how and when an error was made, but he said Social Security was unable to provide evidence of the debt.

“If you’re going to take money that I owe society, fine,” Bowie said, “but it reeks of underhandedness when they reach into your tax refund and they can’t explain what you owe the money for.”

For taxpayers whose refunds already have been seized, the agency said Monday, “no decision has been made regarding whether those individuals . . . would be refunded the payment” unless they can prove they did not receive any notice of the debt.

LaVenia LaVelle, a Social Security spokeswoman, said in a written statement that letters like the one Bowie received went out before Colvin’s order to stop them last week.

“We believe that the overpayments of the individuals receiving notices in the last few days had already been referred to Treasury, were already in the pipeline for processing, and the processing of those cases could not be stopped,” LaVelle wrote.

Social Security officials say they are not holding taxpayers accountable for their parents’ debts, but in many of the cases The Post has detailed, the adult children of deceased parents are losing refunds even though they never received benefits of their own.

Bowie, for example, said he never received direct benefits; rather, his mother, who died in 1996, got survivor’s benefits after his father died. Why the government is now collecting from Bowie, rather than any of his nine siblings, is a mystery to him.

Social Security, which refuses to discuss individual cases even with the taxpayer’s permission, said it seeks payment from surviving children in birth order. Many of the cases The Post has examined involve taxpayers whose refunds were taken even though older siblings were untouched by the collection effort.

In Alan Friedgood’s case, the government last week seized $350 from his tax refund — and from his twin sister’s as well — because the pair’s mother, who died in October, had received a one-month overpayment of benefits in 1975.

“They say they sent her one too many checks” after the death of his father, said Friedgood, who lives in San Rafael, Calif. “They’re just figuring this out 40 years later? It sounds like they’re broke and looking to find money whatever way they can.”

Friedgood’s father died when he was 12, and he said the twins never received direct benefits. “If she owed it, she owed it,” he said, “but for them to come after this out of the blue after 40 years is crazy.”

The enforcement effort on old debts stems from a change slipped into the 2008 farm bill, lifting the statute of limitations that prohibited the government from going after debts that were more than 10 years old. Social Security says it has 400,000 old debts to collect, totalling about $714 million.

Although Grice was pleased to get her money back, she said the matter will not be resolved until the government reinstates the statute of limitations on old debts.

The statement from Social Security said that “while referral of cases to Treasury have been halted, there has been no change in policy pending the agency’s review.”

Grice’s attorney, Robert Vogel, who filed suit in federal court in Greenbelt two weeks ago arguing that the government denied Grice due process by taking her refund without notice, said he has not yet determined how the return of her refund will affect the lawsuit.

“We’re very gratified they reacted so quickly and we hope they act as quickly with respect to the thousands of other Americans who are in Mary’s position,” Vogel said. “It’s really very sad: The class of people affected by this policy can be defined as people who lost a parent at an early age.”

Christina Edwards of Los Angeles was 15 when her father died. Her family received survivors’ benefits until Edwards and her three siblings turned 18 or finished college. On Saturday, Edwards got a notice saying her $1,760 tax refund had been sent to Social Security to cover an overpayment made 28 years ago. None of her siblings’ refunds have been confiscated, she said.

Edwards, 52, said she needed the refund “to buy my mother her insulin this month, which is $600.”

Social Security officials said people whose refunds are still being taken may appeal their cases. Edwards, whose refund was also intercepted last year, did appeal, and like 90 percent of those who do, she was denied.

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