Wednesday, April 16, 2014

The IRS Suspends Program that Seized Tax Refunds to Pay for Parents/Grandparents Decades-old-Debts

The Social Security Administration announced Monday it is suspending a controversial program that goes after adult children of deceased taxpayers who the government claims were recipients of overpayments more than a decade ago. 
Acting Social Security Commissioner Carolyn W. Colvin said she has directed an immediate halt to the three-year-old program while the agency does a review. The controversial program seized tax refunds in an effort to recoup the funds.  
The move to stop the program came after many of the recipients and members of Congress complained to the federal agency. 
"While this policy of seizing tax refunds to repay decades-old Social Security overpayments might be allowed under the law, it is entirely unjust," Democratic Sens. Barbara Boxer of California and Barbara Mikulski of Maryland said in a letter to Colvin. 
The program was authorized by a 2008 change in the law that allows Social Security and other federal agencies to use a Treasury program to seize federal payments to recoup debts that are more than 10 years old. Previously, there was a 10-year limit on using the program. 
In most cases, the seizures are done through tax refunds. 
The change was tucked into the 2008 farm bill -- but trying to track down which lawmaker added in the one line that lifted the 10-year statute hasn’t been easy. And, not surprisingly, Washington lawmakers haven’t been eager to step up to the plate and take the blame. 
[...] 
Sen. Chuck Grassley, R-Iowa, praised the Social Security Administration for suspending the debt collection but continued to raise questions Monday about how this started. 
"It's not clear where that authority came in. There's a difference between collecting decades-old debt from the debtors and decades-old debt from their kids," he said. 
The Social Security Administration says it has identified about 400,000 people with old debts. They owe a total of $714 million.
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