A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s 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, an extremely old debt.
In 1960 when Grice was 4, 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.
Now, Social Security claims it overpaid someone in the Grice family in 1977. But they have no idea who. After 37 years of silence, and four years after Sadie Grice died, the ghoulish government is coming after her daughter. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery and a shame.
The Treasury Department has intercepted $1.9 billion in tax refunds already this year. $75 million of it is debt delinquent for more than 10 years, said Jeffrey Schramek, assistant commissioner of the department’s debt management service. The aggressive effort to collect old debts started three years ago, the result of a single sentence hidden within the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.
No one seems eager to take credit for reopening all these long-closed cases. A Social Security spokeswoman says the agency didn’t seek the change, ask Treasury. Treasury says it wasn’t us, try Congress. Congressional staffers say the request probably came from the bureaucracy. But they are the bureaucracy.
The only explanation the government provides for suddenly going after decades-old debts comes from Social Security spokeswoman Dorothy Clark:
“We have an obligation to current and future Social Security beneficiaries to attempt to recoup money that people received when it was not due.”
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.
“It was a shock,” said 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.”
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’s Social Security number.
Social Security officials told Grice that six people, Grice, her four siblings and her father’s first wife, whom she never knew, had received benefits under her father’s account. The government doesn’t look into exactly who got the overpayment, they engage in a "fishing policy" to seek compensation from the oldest sibling and work down through the family until the debt is paid.
On its website The Federal Trade Commission advises Americans that “family members typically are not obligated to pay the debts of a deceased relative from their own assets.” But Social Security officials say that if children indirectly received assistance from public dollars paid to a parent, the children’s money can be taken, no matter how long ago any overpayment occurred.
“While we are responsible for collecting delinquent debts owed to taxpayers, we understand the importance of ensuring that debtors are treated fairly,” Treasury’s Schramek said in a statement. He said Treasury requires that debtors be given due process.
Social Security spokeswoman Clark, who declined to discuss Grice’s or any other case, even with the taxpayer’s permission, said the agency is “sensitive to concerns about our attempts to arrange repayment of overpayments.” She said that before taking any money, Social Security makes “multiple attempts to contact debtors via the U.S. Mail and by phone.”
But Grice, who works for the Food and Drug Administration and lives in Takoma Park, in the same apartment she’s resided in since 1984, never got any notice about a debt.
Social Security officials told her they had sent their notice to her post office box in Roxboro, N.C. Grice rented that box from 1977 to 1979 and never since. And Social Security has Grice’s current address: Every year, it sends her a statement about her benefits.
“Their record-keeping seems to be very spotty,” she said.
Treasury officials say that before they will take someone’s refund, the agency owed the money must certify the debt, meaning there must be evidence of the overpayment. But Social Security officials told Grice they had no records explaining the debt.
“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,” says 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.”
Grice, the middle of five children, said neither of her surviving siblings, one older, one younger, has had any money taken by the government. When Grice asked why she had been selected to pay the debt, she was told it was because she had an income and her address popped up the correct one this time.
Grice found a lawyer willing to take her case without charge. Vogel is insensed about the constitutional violations he sees in the retroactive lifting of the 10-year limit on debt collection. “Can the government really bring back to life a case that was long dead?” the lawyer asked. “Can it really be right to seize a child’s money to satisfy a parent’s debt?”
But many other taxpayers whose refunds have been taken say they’ve been unable to contest the confiscations because of the cost, because Social Security cannot provide records detailing the original overpayment, and because the citizens,following advice from the IRS to keep financial documents for just three years, had long since trashed their own records.
In Glenarm, Illinois, Brenda and Mike Samonds have spent the past year trying to figure out how to get back the $189.10 tax refund the government seized, claiming that Mike’s mother, who died 33 years ago, had been overpaid on survivor’s benefits after Mike’s father died in, get this, 1969.
“It was never Mike’s money, it was his mother’s,” Brenda Samonds said. “The government took the money first and then they sent us the letter. We could never get one sentence from them explaining why the money was taken.” The government mailed its notice about the debt to the house Mike’s mother lived in 40 years ago.
The Social Security spokeswoman said the agency uses a private contractor to seek current addresses and is supposed to halt collections if notices are returned as undeliverable.
After hours on the phone trying and failing to get information about the debt Mike’s mother was said to owe, the Samondses gave up.
The narrative continues. After waiting on hold for two hours with Social Security last week, Ted Verbich also concluded it wasn’t worth the time or money to fight for the $172 the government intercepted last month.
Keeping anyone waiting on the phone for two hours is nothing more than an evasive customer stall tactic design to frustrate the caller. The best offense is to hold on for dear life.
In 1977, Verbich, now 57, was in college at the University of Maryland when he took a full-time job in an accountant’s office. Because he was earning income, he knew he had to give up the survivor’s benefits his mother had received since his father died, when Verbich was 4. But his $70 monthly checks, “They helped with the car payment,” he said kept coming for a short time after he started work, and Verbich was notified in 1978 that he had to repay about $600. He did.
Thirty-six years later, with no notice, “they snatched my Maryland tax refund,” said Verbich, a federal worker who has lived at the same address in Glendale, Md,. for 30 years and regularly receives Social Security statements there. The feds insisted that he owed $172 but could provide documentation to back up the claim.
Verbich has given up on getting his refund, but he wants a receipt stating that his debt to his country is resolved.
“I’ll put in the request,” a Social Security clerk told Verbich, “but in reality, you’ll never get anything.”
Grice was also told there was little point in seeking a waiver of her debt. Collections can only be halted if the person passes two tests, Clark said: The taxpayer must prove that he “is without fault, and that repayment of the overpayment would deprive the person of income needed for ordinary living expenses.”
More than 1,200 appeals have been filed on the old cases, Clark said; taxpayers have won about 10 percent of those appeals.
The Treasury initially held the full amount of Grice’s federal and state refunds, a total of $4,462. Last week, after The Washington Post inquired about Grice’s case, the government returned the portion of her refund above the $2,996 owed on her father’s account.
But unless the feds can prove that she ever received any of the overpayment, Grice wants all of her money back.
“Look, I love a good fight, especially for principle,” she said. “My mom used to say, ‘This country is carried on the backs of the little people,’ and now I see what she meant. This is really sad.”
Sad doesn't even begin to describe it. The same government that thought nothing of bailing out big banks is scrounging for what amounts to a little more than spare change to them. It's seems as if our government has become the equivalent of a school yard bully who insists on taking your lunch money day after day just because he can. Even though he has his own.
PR
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