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IRS Can Now Seize Your Tax Refund To Pay a Relative's Debt
Hugh Pickens DOT Com (2995471) writes "Just in time for the April 15 IRS filing deadline comes news from the Washington Post that hundreds of thousands of taxpayers expecting refunds are instead getting letters informing them of tax debts they never knew about: often a debt incurred by their parents. The government is confiscating their checks, sometimes over debts 20—30 years old. For example, when Mary Grice was 4 (in 1960), her father died ... 'Until the kids turned 18, her mother received survivor benefits from Social Security ... Now, Social Security claims it overpaid someone in the Grice family in 1977. ... 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 ... $75 million from debts delinquent for more than 10 years according to 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.'"
Since the kids were not over 18 - could the benefit received by the mother not be considered a contract between the govt and the mother and therefore since the kids were too young to be signatories how could they be held accountable?
We had a $186.00 deducted from our tax refund this year for social security. Having never collected social security we called the SSA and was informed that the social securities benefits my wife received as a teen following the death of her father were overpaid as she had a part-time job at a pharmacy and they had deducted the amount. Mind you my wife is 53 years old now.
Just what good is a Statute of Limitations when it can be raised after the fact?
Can they lift the Statute on 40 year old Federal crimes and go out and arrest people?
And this is beside the fact that you are not your parents. Once you are an adult you are an individual.
Survivor benefits are paid to the children, not the surviving parent. The parent only get the money as the custodian of the children, and is supposed to use it for the benefit of the child. The parent doesn't report the benefits on his or her tax return. If the child makes enough money during the year to file a tax return, the child does. So the IRS is going after the party to which the money was given. But of course, it really makes no sense...the child did not actually receive the money. The child has no records of receiving the money, or of any overpayment and can't contest it. It's unlikely even the parent has the records. And it is implied that the IRS can try to collect money from whomever they can get it from, not just the child of record.
The IRS has already stopped collecting these old debts, but let's not let that get in the way of a good political rant..
http://www.forbes.com/sites/ro...
They cancelled this policy almost immediately after it was brought to light.
"The Treasury Department has intercepted ... $75 million from debts delinquent for more than 10 years"
Let's put this into perspective:
$ 75,000,000 collected
$1,386,100,000,000 last year's revenue from individual income tax
I'm sorry, the center you were raised at has unpaid tax bills. They've since shut down so we're recovering all debts from the orphans.
I don't agree with this tactic, but when congress keeps cutting taxes without reducing spending by a matching amount they leave the IRS with few choices but to work harder to pursue outstanding debts.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
I just checked Wikipedia, according to which Bush vetoed the linked "Food, Conservation, and Energy Act of 2008" on May 21, 2008, and had the veto overridden the same day, by a Congress run by Nancy Pelosi and whoever was Senate leader then. (checking... oh, Harry Reid). While I am anxious to find out which Republicans did vote for that bill, it looks like Bush didn't.
If that's the wrong bill I'd like to know about it, since they seem to be linking to it in every story I see on this issue.
(currently testing something about signatures here)
A large refund is a sign of poor tax planning. You are getting your own money back without interest. In light of this story, you may not even get your own money back if the feds take it.
Arrange your source deductions and installment payments so that you don't get a refund.
It would be better to owe $2K each year than to expect refunds.
Just because the time limit has been raised, that doesn't incur a liability for the debt on the part of anyone who isn't already liable for it. And generally children aren't liable for their parent's debts unless their signature's on the contract. The parent's estate might be liable, but good luck collecting from that once the estate's finalized and closed out. I suspect this'll be what any competent attorney will raise as an issue if the victims get one: "Regardless of anything else, this is not my client's debt and the debt being collectible doesn't on it's own make my client liable for it.".
You misunderstand this move. This isn't about the money. A drop in the bucket, utter symbolism.
This is just one small story in many decades of more and more changes to the lender-debtor relationship. In economics I learned that one of the most important reasons for US capitalism's success was that, unlike in other parts of the world until that time where debtor prison and other nasty things awaited anyone who didn't, most often couldn't pay their debts in the US you'd be freed from your debt and then could start over and try again. The invention of the corporation (16th century) was when that movement started that debts are not eternal and that one should be able to try again. It still is true for corporations, but for individuals the noose has been tightening more and more not just in the US. There have been (economic) articles about a growing disparity between economic teaching and reality in the area of lendor-debtor relationship and power for a long time. The power has slowly shifted ever more towards the lender. This story is just one tiny brick in a big wall that was started being built decades ago.
The SSA used a private contractor to make sure all parties were correctly notified about the debt before seizure proceedings were started, which would have allowed incorrect claims to be dropped. Of course, the private contractor screwed that up.
Says you. Try having the IRS owe you a few grand. Still waiting on that check from several years back. In the IRS' defense, the mailman could have cashed it, since banks rarely do pesky stuff like read anymore. I've also had them unilateraly apply tax credits that I wasn't legally eligible for (thank heaven I can't be held liable for their mistakes... yet). That said, it was a big tax giveaway (making work pay act) in an election year so I can't say I'm too surprised. Their behavior can appear quite baffling unless you have looked deeply at the history of their actions.
Seriously, read a few Inspector General's reports before you defend an organization that you know little about. They regularly violate their own rules; especially the ones about not keeping an "enemies list" of tax protestors and not auditing because of RO's personal vendettas. Practically every administration since (and including) FDR have used them as a political weapon against their opponents. Judges and Jurors who decide against them get singled out for audit. Repeated studies by lawyers have shown the Revenue Code to be so self-contradictory that prosecution is effectively discretionary. As such "following the law" is basically whatever they feel like at the moment. Oh, and there's a special tax court that is exempt from due process if they so choose to subject you to it (usually reserved for aformentioned protestors).
But, you are right in saying it's not about the money. It's mostly about Revenue Officers and their self-aggrandizement. The way to get promoted is to maximize seizures, and that has been the case from the beginning. The money comes naturally with those incentives. The frequent strong-arm tactics they use to achieve said siezures (and the above bending of rules) is why they are considered little different from a private criminal organization running a protection racket. The things the tax money is spent on (international murder, political blackmail, crony arrangements) is also little different in practice, so you can forgive why a person could mistake the IRS for a mafia organization. Duck rule and all that.
Now I know some 'a youse are thinking -- "but the government does X charitable thing! They're not all bad, they're compartmentalized, blah blah..." Well, the Mafia runs charities too. Both organizations rely on the forebearance of their victims, so they gotta have some way to paint a positive image over the majority of their activities being rotten. And there will always be fools that believe they can join the Mafia to do good -- however, they will not achieve influence because of the incentive structure (the most rapacious get promoted).
Get over yourselves, people. It's a tough world out there, and a government funded by invoulntary contribution doesn't make any of that go away. Doing Evil that Good May Come (TM) doesn't work out in the long run, so either get used to doing things the hard way, or living in a world dominated by evil. By and large, we've chosen the latter, and we need to accept that rather than getting Stockholm Syndrome about the whole affair. Quit defending people who would kill you with your own money without thinking twice about it.
So, I hope you guys reading TFA realize what this is really about: A bunch of ROs got together and figured out a plausible enough justification to pull in more siezures (and hence more promotions/$$$). They win, the taxpayer loses, the Bureacracies doesn't really care because at the end of the day they have a printing press and whole lots of trigger-pullers. The politicians will continue to try and avoid the subject of the IRS altogether, as that makes people think too much about how the sausage is made rather than the delicious *free* sausage they want to offer up. The courts can be relied upon not to rein in the IRS, as they would prefer not to bite the hand that feeds them. The people (in general) cannot be relied upon because they are widely bamboozled that voting can somehow dislodge such ingrained corruption of incentives. The only person you can rely on is yourself -- If you want this to change, you have to be the change you want to see in others.
Nope. Dem congress passes and Rep pres signs it, Reps at fault.
Dem congress passes with veto-proof majority and Rep pres does not sign, Reps at fault.
Rep congress, Dem pres, Reps at fault.
Dem congress, Dem pres, Reps at fault.
Libs go on and on about how a certain amendment only applies to things invented at the time of its writing then complain about other amendments not automatically applying to modern things. Reps at fault.
See the pattern there.
Not just read out. The Congressmen/Senators should be forced to take a quiz about the contents of the bill afterward. If they are unable to pass it with 100%, they are not allowed to vote for the bill.
Now that the government of the USA has decided to remove the statue of limitations as regards taxation, might I remind Barack Obama of the little matter of unpaid taxes to King George III of England. These date back to your protest against the 1773 Tea Act. Can I tell her Magesty's government that payment will soon be made ?