IRS Can Now Seize Your Tax Refund To Pay a Relative's Debt 632
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.'"
This happened to my wife (Score:5, Interesting)
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.
It kind of makes sense...but it doesn't (Score:5, Interesting)
Re:Over 18 (Score:5, Interesting)
The IRS doesn't recognize incapacity to make agreements.
Re:And they've already stopped (Score:5, Interesting)
No... they SAID they cancelled this policy, immediately after it was brought to light. if they quietly reinstate in whole or in part... who would be the wiser? :)
Re:Over 18 (Score:4, Interesting)
Re:And they've already stopped (Score:3, Interesting)
They cancelled this policy almost immediately after it was brought to light.
I dunno. Are the 0.01%ers trying to figure out a new way to fuck over the middle class?
Since middle class wages have stagnated since the late '70s our share of the tax burden hasn't really been able to grow, and the rich have had their burden reduced quite a bit. So now we have massive debts. Gotta pay 'em somehow. I know, sounds kooky, right?! Look at the filial responsibility laws. [trustbuilders.com] Parent racking up huge debts to the state because of the care they need in old age? Think you won't have to pay for that? Think again [forbes.com].
I expect that we'll start to see enforcement as a way to shift more of the tax burden onto the middle class (at least what's left of it). Banana Republic here we come.
Re:Bush Vetoed this, apparently (Score:5, Interesting)
A majority of Republicans voted for it as well. The real question is who added this particular provision, and are they still in office? I'm not sure how to dig up that crucial bit of info.
Re:Over 18 (Score:5, Interesting)
1. Ex post facto limitations apply to criminal cases, not civil cases.
2. Bills of attainder applies to a specific person or group of persons. I.e. a law saying Joe at 123 Maple Street has to pay 50% of his money to Small Town DPW. In England they were used to execute people, i.e. the govt would pass a law saying Bill will be executed such and such a day.
3. The problem here is due process IF they can't show you the records to justify the seizure. That's really really bad news.
"the agency uses a private contractor" (Score:4, Interesting)
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.
False? (Score:5, Interesting)
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.
Re:Over 18 (Score:5, Interesting)
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.
That's the point. While you are busy attending to the debt left to you by the previous generation, you aren't concerned with matters of democracy to lobby against things like this.
Re:Over 18 (Score:3, Interesting)
What is the federal debt, but inherited debt?
Re:Over 18 (Score:5, Interesting)
Actually for debts to tax authorities due process can be suspended if the government can show they believe providing you with notice of their collections efforts will cause you to hide the money, spend the money, or otherwise dispose of the funds.
I found this out the hard way. The state of MA, due to an error, believed I never filed a tax return and owed them money. When I found out, I told them I was going to dispute it, and a few days after I filed an abatement my accounts were frozen, and I had a tax lien in my name.
Technically, this is illegal (they're supposed to let me dispute the charges and there is supposed to actually be a judgement as to whether or not my case had merit). However, when I tried to get legal help, I found out the reason they could do this because they simply told a judge they had to have the lien so I didn't run away with my money. (Which is funny because I'm unemployed and just on this side of broke -- the judge should have laughed them out of town).
When I fought it, the lien and the frozen accounts were reversed promptly, but not without a big pain in the ass.
I'm afraid from what I understand, this is typical. Even if the IRS is wrong, the cards are stacked in their favor if they believe you're right (or incorrectly believe you to be an international man of mystery tax dodger). And until you convince them otherwise, they can make your life VERY miserable.
You need to get real legal advice and stop asking slashdot for help on your problems.
Re:Over 18 (Score:3, Interesting)
The entire reason for the IRS and the income tax was to restore slavery. Sure the slaves are different, but interestingly and unsurprisingly the slave holders are largely the same group.
Re:Over 18 (Score:5, Interesting)
This is far worse than inheretence of debt. They are seizing these people's refunds based on debts that they claim their parents have incurred. Yet when the woman in the article demanded proof of the debt they were unable to produce any. She was supposed to get a due process review before they seized her money but all of the notices of that right just happened to go to a PO box she hadn't had in decades. Yet when it came time to collect they suddenly had her right address. From the article this pattern is not uncommon. So basically we have the IRS collecting a debt that they can't even prove is a debt and doing so, either through intent or incompetence, in a way that deprives the victims of their due process rights to challenge it. Even if you accept the premise of a child inhereting the parents debt, which I really fail to see any legimate basis for, this method of collecting those debts stinks on ice. I mean with they way they have this setup they could just declare anybody owed any amount that they desired to collect. After all they are not providing any proof and are simply siezing your money with no due process. I hope the lady in the article prevails in her court case. Because if she doesn't the rest of us will never know when some "old debt" will appear.
I noticed a couple of other disturbing things in this article. Ms Grice's father only owed, by their unsubstanitated claim, $2,996. Yet they seized her entire refund of $4,462 and only released the difference to her after the Washington Post started questioning it. So in addition to making her pay a debt that isn't hers, that they have no proof of and that they deprived her of her due process rights for, they also helped themselves to an additional $1,466 of her money that they only released under pressure from the press. Some of the other cases seem to be for fairly token amounts. Makes you wonder if what we are seeing here is the IRS adopting the tactic of demanding money from people that is just a bit less than what they can afford to fight for. Hopefully the courts will strike this whole thing down.
Re:Over 18 (Score:5, Interesting)
Hopefully the courts will strike this whole thing down.
All of the IRS? I agree.
I think funding for the federal government should come out of the states' treasuries instead. That way federal spending decisions will be weighed against the lost opportunity to fund state programs.
Re:Over 18 (Score:5, Interesting)
Don't you know, the $4,462 was seized. Because of interest. That's right, when they find a debt like that they charge compounding interest. And they charge it at a rate no one can get on their savings accounts.
So I wager that they consider Ms. Grice to actually owe about $20,000 still.
***
Please note that I had a friend who was taxed on a million dollars in stock options that he never sold, and never made money from (dot com bust). Mortgaged house to pay taxes. Took it to court, won as it was deemed unconstitutional. IRS was ordered to pay it back. And they are....in increments over 20 years.
That's right, they demanded it now. And are paying it back slowly.