People's Tax Refunds Will Be Used to Pay Decades-Old Debts From Parents

| by Jonathan Wolfe

Don’t get too excited thinking about how you will spend your tax return just yet.

The Washington Post reports that the Social Security Administration and the Treasury Department are intercepting refund checks from thousands of unsuspecting Americans to pay off debts incurred by past family members.

In their coverage of the issue, the Post tells the story of Mary Grice, a Maryland woman who received a notice in the mail saying her refund was intercepted by federal agencies. Grice was told her funds were being used to pay off a debt from 1977 when Social Security accidentally overpaid her mother in a support payment.

The agency would not say why they waited until now to collect the old debt or why they tapped Grice to pay it. When Grice tried to protest the collection, the IRS responded with intimidation tactics.

"It was a shock," she said. "What incenses me is the way they went about this. They gave me no notice, they can't prove I received any overpayment, and they use intimidation tactics, threatening to report this to the credit bureaus."

So far this year, federal agencies have collected over $75 million in debts over 10 years old. Since 2011, agencies have collected over $424 million in these debts. The collections started in 2011, when Congress wiped out a clause in the farm bill forbidding the government from collecting debts over 10 years old.

The collections won’t stop anytime soon, either. The Social Security Administration says they plan to collect $714 million in debts over 10 years old from roughly 400,000 taxpayers.

Grice is now suing the Social Security Administration in federal court, saying they are violating her right to due process by holding her responsible for the $2,996 debt incurred on her father’s social security number.

“The craziest part of this whole thing is the way the government seizes a child’s money to satisfy a debt that child never even knew about,” said Robert Vogel, Grice’s attorney. “They’ll say that somebody got paid for that child’s benefit, but the child had no control over the money and there’s no way to know if the parent ever used the money for the benefit of that kid.”

Sources: Washington Post, Newser