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The Almighty Buck Government United States Politics

IRS Can Now Seize Your Tax Refund To Pay a Relative's Debt 632

Posted by Unknown Lamer
from the dead-...-beat-relatives? dept.
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.'"
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IRS Can Now Seize Your Tax Refund To Pay a Relative's Debt

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  • Over 18 (Score:5, Insightful)

    by Anonymous Coward on Monday April 14, 2014 @09:03PM (#46752755)

    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?

  • Ex Post Facto Law (Score:5, Insightful)

    by Anonymous Coward on Monday April 14, 2014 @09:11PM (#46752795)

    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.

  • Pocket change (Score:4, Insightful)

    by Anonymous Coward on Monday April 14, 2014 @09:13PM (#46752811)

    "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

  • by Cryacin (657549) on Monday April 14, 2014 @09:18PM (#46752861)
    So what? How about I go over your house and beat your face in. Hey, I've stopped now! Let's not let that get in the way of a good criminal rant!
  • by eric31415927 (861917) on Monday April 14, 2014 @09:27PM (#46752923)

    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.

  • by Anonymous Coward on Monday April 14, 2014 @09:27PM (#46752931)

    It's good they are going to stop. But I think the issue is that it had to be "brought to light". What kind of government do we have now that is collecting supposed debts from people who did not even receive the money. What if the government told you that you owed money for your neighbors debts, almost the exact same thing.

    Oh wait they do its called Social Security, Welfare, Food Stamps, Affordable Care Act and every other government hand out that is subsidized by the ones who work to the ones who don't.

  • by Todd Knarr (15451) on Monday April 14, 2014 @09:32PM (#46752963) Homepage

    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.".

  • by arbiter1 (1204146) on Monday April 14, 2014 @09:39PM (#46753005)
    Doesn't really matter what republicans voted for it, key fact is senate was DEMOCRAT controlled so they are the majority of ones that pushed it in to law so.
  • by Phil-14 (1277) on Monday April 14, 2014 @09:42PM (#46753035)

    The Senate and the House both were Democrat at the time. But I want to see the list of Republicans who voted for it too, because primaries are coming up.

  • Re:Over 18 (Score:2, Insightful)

    by Sir_Sri (199544) on Monday April 14, 2014 @09:56PM (#46753109)

    Presumably it is the estate they are going after, and as beneficiaries of the estate they are responsible for the debts of the estate.

    Of course this many years later it is impossible to try and defend yourself, particularly as the law *was* that 10 year old debts disappeared, so you could destroy any paperwork from the estate from before 2003 or 2004, and now have no paperwork trail to try and defend yourself with (assuming you had one to begin with, given that inheriting an estate comes with inheriting whatever recording keeping was done, which may have been terrible).

  • No it does not. (Score:4, Insightful)

    by mha (1305) on Monday April 14, 2014 @10:04PM (#46753147) Homepage

    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.

  • Re:Over 18 (Score:4, Insightful)

    by AK Marc (707885) on Monday April 14, 2014 @10:22PM (#46753227)
    Of all the problems, that's the one you attach to? This is an ex post facto law (the debt was "clear" in 2010, and owed in 2014 due to change of law). It's seizing without due process, and it's an illegal bill of attainder. Though I'm sure it's a new class of "seizure" that doesn't need to follow any of the legal protections in the Constitution. Like being pulled over for speeding is both an arrest and not an arrest at the same time so they can pick and choose rights and powers that apply.
  • by Anonymous Coward on Monday April 14, 2014 @11:19PM (#46753473)

    Liberals are tax and spend, Conservatives are spend and spend until they prove that the government is broken. Mission accomplished!

  • Re:Over 18 (Score:5, Insightful)

    by Z00L00K (682162) on Monday April 14, 2014 @11:21PM (#46753491) Homepage

    But they seem to recognize inheritance of debt.

    I thought that inherited debt was something that was used in medieval times and in some third world countries to effectively create slavery.

  • Re:Over 18 (Score:5, Insightful)

    by Anonymous Coward on Monday April 14, 2014 @11:53PM (#46753613)

    You are right, and that is effectively what they are attempting now. A way to increase revenue and have a class of people that are eternally in poverty with no recourse.

  • by kwbauer (1677400) on Tuesday April 15, 2014 @12:16AM (#46753691)

    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.

  • Re:Over 18 (Score:5, Insightful)

    by Duhavid (677874) on Tuesday April 15, 2014 @01:19AM (#46753997)

    Quite. Now, who added the single line spoken of to the farm bill that opened the door for this?

  • Re:Over 18 (Score:5, Insightful)

    by Applehu Akbar (2968043) on Tuesday April 15, 2014 @01:23AM (#46754023)

    Yes, multi-generation debt is totally illegal in the private sector. For evil of this mind-numbing intensity, you need a government.

  • by TFAFalcon (1839122) on Tuesday April 15, 2014 @01:27AM (#46754049)

    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.

  • Re:Over 18 (Score:5, Insightful)

    by Chris Mattern (191822) on Tuesday April 15, 2014 @05:44AM (#46755009)

    No. The heirs are not responsible for the debts of the estate. The debts are paid by the executor out of the assets of the estate.

    I think I see what's happening now. It's been sensationalized. What's happened is that the estate was settle and the heirs were paid. What the IRS is going after is not the daughter's assets per se but the inherited assets paid to her improperly out of the estate because the estate didn't settle its debts with the IRS.

  • by dkf (304284) <donal.k.fellows@manchester.ac.uk> on Tuesday April 15, 2014 @07:59AM (#46755679) Homepage

    And that's why having bills cover lots of things at once (rather than being automatically restricted to the principal subject area of the bill) is a truly awful practice. It's beyond corrupt as it specifically enables effectively sidestepping oversight of the legislative process. The pork-barrel politics the practice enables are merely the most visible and least harmful parts of this.

  • Re:Over 18 (Score:5, Insightful)

    by RabidReindeer (2625839) on Tuesday April 15, 2014 @10:08AM (#46756747)

    No. The heirs are not responsible for the debts of the estate. The debts are paid by the executor out of the assets of the estate.

    I think I see what's happening now. It's been sensationalized. What's happened is that the estate was settle and the heirs were paid. What the IRS is going after is not the daughter's assets per se but the inherited assets paid to her improperly out of the estate because the estate didn't settle its debts with the IRS.

    It's been double-sensationalized. The headline would lead one to believe that the IRS could steal your refund to pay for what your brother-in-law owes.

  • Re:Over 18 (Score:5, Insightful)

    by DigiShaman (671371) on Tuesday April 15, 2014 @01:58PM (#46759763) Homepage

    Well YES! That's the Democrat (the politicians, not the voters) Party for you. Rules for them, and rules for everyone else. They actually believe in a caste based system. The idea being that if you accept your position in life, you'd be less inclined to fight for a higher standard of living. It makes management of a serfdom much easier along with the ease of accumulation of power.

"Ignorance is the soil in which belief in miracles grows." -- Robert G. Ingersoll

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