Someone Tucked an Obscure Line into the Farm Bill That Allows the Treasury Department to Destroy Due Process
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 — a very old debt.Treasury says it is acting now because it can. The statute of limitations was lifted in 2011. Who lifted it? No one will admit it.
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.
Now, Social Security claims it overpaid someone in the Grice family — it’s not sure who — 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’s money, rather than her surviving siblings’, is a mystery.
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 — often a debt incurred by their parents — the government has confiscated their check.
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.Except, it’s illegal. Debts owed by the dead do not transfer to their children, to be paid out of their own assets. Tax refunds are money refunded to Americans because of tax overpayments. That money belongs to citizens, not the government.
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.
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.”
These cases come with no notice, just a letter that the government has intercepted the tax refunds, along with threats that failure to comply may be reported negatively to credit rating agencies. In Grice’s case, the government seems to have gone out of its way not to notify her at all.
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.That’s being generous.
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.Yes, the irony is obvious. As a government bureaucrat who lives in leftwing Tacoma Park, Grice is probably a big fan of big government. That doesn’t take away from the injustice that’s being done to her and thousands of others — $1.9 billion dollars worth this year.
“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.”
There is no recourse for Americans who have had their money taken. They can file a claim, but it will probably go nowhere. Only 10% of appeals have been successful so far, even though the government can’t even prove that the debts ever existed in most cases.
The farm bill that enabled Treasury to torch due process is always notoriously long and full of obscure subsidies and other things that the congresspeople who pass it never bother to read. No one will even own up to lifting the statute of limitations, but clearly Treasury got wind of the change very quickly and acted on it.
If your tax refund is smaller than you expected this year, you may be a victim of this criminal government theft spree.