IRS seizes tax refunds of children to pay dead parents debt.

This latest example of government overreach is just crazy.  According to Marc Fisher of the Washington Post, hundreds of thousands of taxpayers have had their tax refunds withheld to satisfy a debt owed to the government resulting from Social Security overpayments. The debts in question are more than 10 years old and are the result of mistakes made by the Social Security Administration. And here's the real kicker, often the tax refunds were confiscated from the children of the individuals who actually received the overpayments but have since died. As far fetched as it sounds, the Social Security Administration has somehow come to the conclusion that it is perfectly fine to go through old records, dig up ambiguous debts and hold lineal descendants responsible for them.

It seems these aggressive debt collection efforts started three years ago though according to Fisher, no one wants to take responsibility for it. What is known is that a single sentence included in the 2008 Farm Bill removed the 10-year statute of limitations on the collection of government debt. What this has to do with farming I have no idea but here is the offending section: SEC. 14219. ELIMINATION OF STATUTE OF LIMITATIONS APPLICABLE TO COLLECTION OF DEBT BY ADMINISTRATIVE OFFSET. (a) Elimination.--Section 3716(e) of title 31, United States Code, is amended to read as follows: ``(e)(1) Notwithstanding any other provision of law, regulation, or administrative limitation, no limitation on the period within which an offset may be initiated or taken pursuant to this section shall be effective.  As a side note, this section is a total of 63 words. The farm bill itself is 276,602 words long. This alone speaks volumes about how confusingly dysfunctional government has become.

The removal of the 10 year statue of limitation explains how Social Security is now able to try and collect on old overpayments but how do they justify holding the children of the recipients responsible? According to the article, Social Security officials say that if children indirectly received assistance from public dollars paid to the parent, the children's money can be taken no matter how long ago the overpayment occurred. This seems pretty flimsy to me. For one, how would they know if the children received any benefit from the overpayments. Maybe they had lousy parents that went to the casinos every weekend or blew it at the local bar. There is no way to know. Also, there is a reason why contracts with minors are unenforceable. It's because as a society we believe they lack the capacity to fully understand what they would be agreeing to due to their age. It seems to me the same principle would apply here. 

Fisher reported that over the past 3 years the Treasury Department has collected $424 million in debts that were more than 10 years old. He points out that most people who have tried to appeal the confiscation were either denied or gave up after enduring long hours on hold. Still, it is amazing to me that it took this long for someone from the media to discover and report about this. Since Fisher's article was published last week, there has been a huge backlash which has prompted members of congress to address the issue. As a result, the Social Security Administration is currently suspending the program. But there are still unanswered questions and I'm sure there will be some fallout. 

Social Security, Treasury target taxpayers for their parents’ decades-old debts