The U.S. government should stop confiscating taxpayers’ refunds to pay off decades-old debts to Uncle Sam that their parents may have incurred, two senators said Friday.
Sens. Barbara Boxer (D-Calif.) and Barbara A. Mikulski (D-Md.) asked the Social Security Administration to halt its three-year-old practice of intercepting taxpayers’ federal and state refunds to cover overpayments that the agency says it made to families more than 10 years ago. The practice, which affects about 400,000 families that once received Social Security benefits, was detailed in The Washington Post on Friday.
After reading about Mary Grice, a federal worker in Takoma Park whose tax refunds were taken a few weeks ago to pay off a 37-year-old overpayment of $2,996, the senators asked Social Security to waive collections of old debts in cases where it’s not clear that the surviving relative ever received benefits.
“While this policy of seizing tax refunds to repay decades-old Social Security overpayments might be allowed under the law, it is entirely unjust,” Boxer and Mikulski wrote to Social Security’s acting commissioner, Carolyn Colvin. “Garnishing taxpayers’ refunds to pay for debts that are more than a decade old — and incurred through no fault of their own — is a policy that cannot be continued in good conscience.”
In Grice’s case, her father died when she was 4, and her mother received survivor’s benefits and used them to raise five children. When Grice turned 18, she briefly received benefits directly, until she entered the workforce.
Following a one-line change in the farm bill in 2008, the Treasury rewrote regulations to allow the government to take tax refunds from citizens who owe the government debts that are more than 10 years old. That change, the government says, gives it the right to collect on debts like the one created when Social Security overpaid someone in the Grice family in 1977. Social Security says it seeks to collect from surviving children in birth order, but Grice, the middle of five children, is the only one in her family to have had her refund taken.
“Grice and other families like hers are unfairly being held responsible for decades-old errors at the Social Security Administration — even though many of these taxpayers were children at the time the error was made,” Boxer and Mikulski wrote. “Too many of these families are now finding themselves trapped in a mess of paperwork and red tape.”
The chairman of the House subcommittee that oversees Social Security, Rep. Sam Johnson (R-Tex.), pledged to “take the needed actions” to make certain that the government treats taxpayers well. “While Social Security has a responsibility to the American taxpayer to collect overpayments,” he said, The Post’s account “raises serious questions as to how the agency is administering the law.”
The Treasury Department has intercepted $1.9 billion in tax refunds this year, $75 million of that on debts delinquent for more than 10 years, officials said. Social Security alone has identified about $714 million in old debts.
The aggressive collection effort started after a single sentence was tucked into the 2008 farm bill lifting the 10-year statute of limitations on old debts.
Dozens of new cases like Grice’s surfaced Friday, many involving survivor’s benefits paid to families after a parent’s death. The payments often went to a surviving parent, but the government argues that because the money was intended to help the children, they are responsible for decades-old overpayments.
Lawyers are often reluctant to take on these cases because the debts tend to be small and the work is time-consuming. But Marcia Anderson, of Mount Airy, Md., handled dozens of overpayment cases before winding down that work.
“Some of the people whose refunds are being taken are not even related to the original debtor,” she said. “I had a number of cases where people were the payee for someone else’s benefits,” which can happen when a beneficiary is disabled or imprisoned.
Decades later, the government is taking tax refunds not from the beneficiary but from the unrelated representative, Anderson said.
“I was buried in these cases, and they are heartbreaking,” she said. “The government is not supposed to hold children liable, but they keep assessing the child.”
The cases are especially difficult for taxpayers because “it’s their word against the government’s,” Anderson said, “and very few people keep records for decades.”
J. Marc Dion, a former police officer who is now a lawyer in Westlake Village, Calif., had his $2,000 tax refund intercepted this year to compensate the government for a debt that Social Security says he owes because he received too much in disability benefits while he was in law school more than a decade ago.
Dion won a judgment against Social Security in 2010, but the debt collection continues. “None of it makes sense, and I’m an attorney,” Dion said. “You can’t get a straight answer from anybody.”