A few weeks ago, with no notice, the U.S. government intercepted Mary Grice\u2019s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government \u2014 a very old debt.<\/p>\n
When 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.<\/p>\n
Now, Social Security claims it overpaid someone in the Grice family \u2014 it\u2019s not sure who \u2014 in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary\u2019s money, rather than her surviving siblings\u2019, is a mystery.<\/p>\n
Across the nation, hundreds of thousands of taxpayers who are expecting refunds this month are instead getting letters like the one Grice got, informing them that because of a debt they never knew about \u2014 often a debt incurred by their parents \u2014 the government has confiscated their check.<\/p>\n
The Treasury Department has intercepted $1.9 billion in tax refunds already this year \u2014 $75 million of that on debts delinquent for more than 10 years, said Jeffrey Schramek, assistant commissioner of the department\u2019s debt management service. The aggressive effort to collect old debts started three years ago \u2014 the result of a single sentence tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.<\/p>\n
No one seems eager to take credit for reopening all these long-closed cases. A Social Security spokeswoman says the agency didn\u2019t seek the change; ask Treasury. Treasury says it wasn\u2019t us; try Congress. Congressional staffers say the request probably came from the bureaucracy.<\/p>\n
The only explanation the government provides for suddenly going after decades-old debts comes from Social Security spokeswoman Dorothy Clark: \u201cWe have an obligation to current and future Social Security beneficiaries to attempt to recoup money that people received when it was not due.\u201d<\/p>\n
Since the drive to collect on very old debts began in 2011, the Treasury Department has collected $424 million in debts that were more than 10 years old. Those debts were owed to many federal agencies, but the one that has many Americans howling this tax season is the Social Security Administration, which has found 400,000 taxpayers who collectively owe $714 million on debts more than 10 years old. The agency expects to have begun proceedings against all of those people by this summer.<\/p>\n
\u201cIt was a shock,\u201d said Grice, 58. \u201cWhat incenses me is the way they went about this. They gave me no notice, they can\u2019t prove that I received any overpayment, and they use intimidation tactics, threatening to report this to the credit bureaus.\u201d<\/p>\n
Grice filed suit against the Social Security Administration in federal court in Greenbelt this week, alleging that the government violated her right to due process by holding her responsible for a $2,996 debt supposedly incurred under her father\u2019s Social Security number.<\/p>\n
Social Security officials told Grice that six people \u2014 Grice, her four siblings and her father\u2019s first wife, whom she never knew \u2014 had received benefits under her father\u2019s account. The government doesn\u2019t look into exactly who got the overpayment; the policy is to seek compensation from the oldest sibling and work down through the family until the debt is paid.<\/p>\n
The Federal Trade Commission, on its Web site, advises Americans that \u201cfamily members typically are not obligated to pay the debts of a deceased relative from their own assets.\u201d But Social Security officials say that if children indirectly received assistance from public dollars paid to a parent, the children\u2019s money can be taken, no matter how long ago any overpayment occurred.<\/p>\n