Author Topic: IRS going after heirs!!!  (Read 10689 times)

Exflyboy

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IRS going after heirs!!!
« on: April 12, 2014, 10:53:55 AM »
Yes its happening folks.

The way it works is if your parents have been overpaid by Social security (apparently) then you'll mysteriously won't get your tax refund.

The segment I heard on the radio they mention a few overpayments that we DECADES old and because of some weird provision in the farm bill they can do this.

I wonder if this is the thin end of the wedge?

This year no refund, next year a big fat bill for overpayments.

Oh your Mom was not paying her taxes? (I wouldn't be surprised if my MIL isn't).. then you dear child owe us.

Be warned, this is really happening!!!

Frank

arebelspy

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Re: IRS going after heirs!!!
« Reply #1 on: April 12, 2014, 11:00:00 AM »
I wonder if this is the thin end of the wedge?

This year no refund, next year a big fat bill for overpayments.

(Emphasis added.)

I've never heard that phrase.  I like it.

Why would children be responsible for their parents debts?  As far as I'm concerned, the IRS should be putting in a claim with the probate court at the appropriate time.

Links with more info?
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geekette

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Re: IRS going after heirs!!!
« Reply #2 on: April 12, 2014, 11:04:56 AM »
Lots of links on google - here's the WaPo one - linky.

Exflyboy

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Re: IRS going after heirs!!!
« Reply #3 on: April 12, 2014, 11:05:19 AM »
I was on NPR (National Public Radio) this morning ..

http://www.npr.org/2014/04/12/302166487/irs-chases-children-for-debts-of-their-dead-parents

They have not posted the audio yet.. later this morning it will be up apparently.

Frank

arebelspy

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Re: IRS going after heirs!!!
« Reply #4 on: April 12, 2014, 11:07:40 AM »
Thanks for the links!  I did a search on Google News, but was apparently searching for the wrong thing, I found some article about MLK Jr's Heirs Tax issues.  ;)
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arebelspy

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Re: IRS going after heirs!!!
« Reply #5 on: April 12, 2014, 11:09:58 AM »
Wow, that's some bullshit.

Quote
Social Security officials say that if children indirectly received assistance from public dollars paid to a parent, the children’s money can be taken, no matter how long ago any overpayment occurred.

The government just keeps pushing the envelope on what people will put up with.
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Daleth

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Re: IRS going after heirs!!!
« Reply #6 on: April 12, 2014, 11:11:11 AM »
I think this is obnoxious. To quell the hysteria of the tinfoil hat types, I do want to point out that apparently the only way this works is if your parents were overpaid by Social Security **AND** you were a beneficiary of that overpayment, then the IRS can come after you for the debt. For instance, if your dad died when you were a kid, your mom got Social Security benefits as a result of that to help her raise the kids, and she got overpaid, then the IRS can come after the kids because they were "beneficiaries" of that overpayment (in other words, their mom is presumed to have spent the money raising the kids). Apparently the rules are that they start with the eldest child and move down from there until they find one who can pay.

Here's the one case I've heard of:
http://www.washingtonpost.com/politics/social-security-treasury-target-hundreds-of-thousands-of-taxpayers-for-parents-old-debts/2014/04/10/74ac8eae-bf4d-11e3-bcec-b71ee10e9bc3_story.html

I still think it's completely obnoxious, but wanted it to be clearer how limited the parameters of this are.

arebelspy

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Re: IRS going after heirs!!!
« Reply #7 on: April 12, 2014, 11:12:28 AM »
Here's the one case I've heard of

That article mentions multiple people, not just "one case".  If the WaPo could find 4-5 people that quickly for an article, it's pretty widespread.

Hell, the article notes:
Quote
The Treasury Department has intercepted $1.9 billion in tax refunds already this year — $75 million of that on debts delinquent for more than 10 years, said Jeffrey Schramek, assistant commissioner of the department’s debt management service.

75MM for this already collected, and we haven't hit the tax day crunch.  Considering the amounts intercepted in the article ranged from a few hundred to a few thousand, that's likely tens of thousands, if not over a hundred thousand, people affected.  Not just "one case."  In other words, I wouldn't downplay how "rare" it is, based on that article.

I still think it's completely obnoxious, but wanted it to be clearer how limited the parameters of this are.

For now.
« Last Edit: April 12, 2014, 11:16:29 AM by arebelspy »
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Exflyboy

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Re: IRS going after heirs!!!
« Reply #8 on: April 12, 2014, 11:14:18 AM »
I still think it's completely obnoxious, but wanted it to be clearer how limited the parameters of this are.

For now.

My thought exactly!

Daleth

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Re: IRS going after heirs!!!
« Reply #9 on: April 12, 2014, 01:48:43 PM »
The IRS nabs refunds for lots of debts. Delinquent student loans, past due child support, delinquent VA loans, prior tax debts, etc. You didn't post the article you saw this in but I would bet that the $1.9B is for all refunds intercepted for any type of debts

I'm with you on that.

arebelspy

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Re: IRS going after heirs!!!
« Reply #10 on: April 12, 2014, 01:59:56 PM »
It's from the Washington Post article linked twice, including the poster I was quoting and responding to.  ;)

And yes, there are lots of reasons for them to intercept refunds, which gets to that 1.9B number, but it said 75MM was for debts over 10 years old (and 75MM was the number I stated after quoting that, not 1.9B).  Some of that may be old debts not yet collected, some may be from parent debts they're just starting to collect.
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Jamesqf

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Re: IRS going after heirs!!!
« Reply #11 on: April 13, 2014, 10:46:20 AM »
The IRS nabs refunds for lots of debts.

Yet another good reason to arrange things so that instead of getting a refund, you wind up sending them a few dollars :-)

dragoncar

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Re: IRS going after heirs!!!
« Reply #12 on: April 13, 2014, 08:02:52 PM »
The IRS nabs refunds for lots of debts.

Yet another good reason to arrange things so that instead of getting a refund, you wind up sending them a few dollars :-)

Apparently this is also the case with, say, Obamacare fraud.  If you claim a larger subsidy than you are entitled to, the best they can do is try to intercept your refund.  Supposedly.

DoubleDown

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Re: IRS going after heirs!!!
« Reply #13 on: April 15, 2014, 03:32:43 PM »
The Washington Post reported this morning that the Treasury Department has announced they will stop the practice of going after debts older than 10 years. They also expect to stop going after the children of debtors in the near future, though they have not instituted that just yet. Backlash from some members of Congress and the public did the trick in this case (although it was Congress that first wrote the change in the Farm Bill for Treasury to go after old debts in the first place). The woman profiled in the original Post article, who got her refund taken for a 37-year old debt in her father's name, has a federal lawsuit pending.

I read this in the dinosaur paper version of the Post and am too lazy to post a link, so you can Google it if interested ;-)

arebelspy

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Re: IRS going after heirs!!!
« Reply #14 on: April 15, 2014, 03:49:51 PM »
The Washington Post reported this morning that the Treasury Department has announced they will stop the practice of going after debts older than 10 years. They also expect to stop going after the children of debtors in the near future, though they have not instituted that just yet. Backlash from some members of Congress and the public did the trick in this case (although it was Congress that first wrote the change in the Farm Bill for Treasury to go after old debts in the first place). The woman profiled in the original Post article, who got her refund taken for a 37-year old debt in her father's name, has a federal lawsuit pending.

I read this in the dinosaur paper version of the Post and am too lazy to post a link, so you can Google it if interested ;-)

Awesome.  Yay for publicity on this issue putting pressure on them to stop it.

Thanks for the update!
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TrulyStashin

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Re: IRS going after heirs!!!
« Reply #15 on: April 16, 2014, 04:16:11 PM »
Just to clarify one issue...

In cases where a child is paid Social Security benefits because one parent died, legally speaking, that money belongs to the child even when the child is still a minor and thus the SSA sends the payment to the surviving parent.  The parent receiving the money on behalf of the child is acting as a fiduciary and must be VERY careful in how they preserve the CHILD's asset.

I'm an attorney and my secretary is in this situation -- her husband died a few years ago and their (now) 13 year old daughter gets his SSA benefits.  My secretary wanted to tie the money up in a trust with limits on how it can be spent (for education) so the child doesn't get a windfall at age 18, but legally, she may not do that.  If the SSA overpays my secretary then, under the law, they've overpaid the child.  The mother is just the agent.

So, in this situation where the SSA overpays a custodial parent (by, for example, continuing to send payment after the child is 18 and should no longer get them; or if the child died before reaching age 18),legally the SSA overpaid the child because the money belonged to the child and that's why the IRS is coming after the (now, adult) children.  Any adult child in this situation may have a cause of action against their parent (slim chance of that, but maybe if the parent knew of the overpayment).

Fun times.

countdown

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Re: IRS going after heirs!!!
« Reply #16 on: April 16, 2014, 07:21:18 PM »
Announcement of hold on program.
[url]http://www.ssa.gov/news.htm[url]

Zamboni

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Re: IRS going after heirs!!!
« Reply #17 on: April 17, 2014, 03:58:31 AM »
I do not see how anyone can make payment to a MINOR and then wait until they are an adult and say "Oops, there was a mistake, and now you owe us that money back."  A minor is not capable of contracting, and therefore could not have agreed to these payments or the parameters of such payments in any legal sense.  They certainly could not have legally agreed to any terms for repayment.  A minor would not be considered capable of legal understanding of whether or not payments from the government were correct or made in error.  So, the payments must really legally be considered to be to the adult parent or guardian, who should then be legally responsible for the money (and any debt should die with them.)

I'm glad there was backlash, because we are usually not all completely in agreement on this board, but in this case we all seem to agree that this is bullshit.

Rebecca Stapler

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Re: IRS going after heirs!!!
« Reply #18 on: April 17, 2014, 07:07:21 AM »
Announcement of hold on program.
[url]http://www.ssa.gov/news.htm[url]

Good news. Let's see what they decide to do. It's not like they have a very good reputation these days. But I suspect that they'll put it on hold for years, until people forget about the recent scandal, and then get the program going again.

arebelspy

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Re: IRS going after heirs!!!
« Reply #19 on: April 17, 2014, 09:15:41 AM »
Announcement of hold on program.
[url]http://www.ssa.gov/news.htm[url]

Good news. Let's see what they decide to do. It's not like they have a very good reputation these days. But I suspect that they'll put it on hold for years, until people forget about the recent scandal, and then get the program going again.

Yeah, anyone get the feeling the government tries a lot of stuff nowadays just to see how much people will protest and just to see if they can get away with it?  Even if caught, if there isn't too much of an uproar, then people just get used to it. 
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dragoncar

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Re: IRS going after heirs!!!
« Reply #20 on: April 17, 2014, 10:19:42 AM »
Announcement of hold on program.
[url]http://www.ssa.gov/news.htm[url]

Good news. Let's see what they decide to do. It's not like they have a very good reputation these days. But I suspect that they'll put it on hold for years, until people forget about the recent scandal, and then get the program going again.

Yeah, anyone get the feeling the government tries a lot of stuff nowadays just to see how much people will protest and just to see if they can get away with it?  Even if caught, if there isn't too much of an uproar, then people just get used to it.

FTFY

DoubleDown

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Re: IRS going after heirs!!!
« Reply #21 on: April 18, 2014, 02:35:19 PM »
The woman who was primarily profiled in the original Washington Post story was 4 when her father died and her mother started receiving benefits. The woman is now around age 54, her mother is dead, and she's only now had her tax refund confiscated for overpayments allegedly made to her mother some 40 years ago. I'm not a lawyer, but I can't think of any circumstances where a creditor gets to go after the child of an (alleged) debtor, particularly 40 years after the fact. She also has 4 siblings, and is the middle child; they just picked her for reasons that are unexplained.

What was additionally amusing/pathetic is that when the woman contacted Social Security to get answers to what the hell happened, she was not provided with any means of examining the alleged debt -- she just had to take their word for it that there was an overpayment. And they sent their supposed "notification" of the debt to a PO box the woman last held about 30 years ago, only for about a year (even though they have her current, correct address on file since she receives her annual statement from them every year).

The whole thing sounds ridiculously unjustifiable to me. I hope her lawsuit stands up, she gets her tax refund back, and maybe some punitive damages to boot.

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Re: IRS going after heirs!!!
« Reply #22 on: April 21, 2014, 09:13:20 AM »
Announcement of hold on program.
[url]http://www.ssa.gov/news.htm[url]

Good news. Let's see what they decide to do. It's not like they have a very good reputation these days. But I suspect that they'll put it on hold for years, until people forget about the recent scandal, and then get the program going again.

Yeah, anyone get the feeling the government tries a lot of stuff nowadays just to see how much people will protest and just to see if they can get away with it?  Even if caught, if there isn't too much of an uproar, then people just get used to it.

Yep.  What the hell is going to be next? 

oldtoyota

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Re: IRS going after heirs!!!
« Reply #23 on: May 01, 2014, 06:53:34 AM »
The Washington Post reported this morning that the Treasury Department has announced they will stop the practice of going after debts older than 10 years. They also expect to stop going after the children of debtors in the near future, though they have not instituted that just yet. Backlash from some members of Congress and the public did the trick in this case (although it was Congress that first wrote the change in the Farm Bill for Treasury to go after old debts in the first place). The woman profiled in the original Post article, who got her refund taken for a 37-year old debt in her father's name, has a federal lawsuit pending.

I read this in the dinosaur paper version of the Post and am too lazy to post a link, so you can Google it if interested ;-)

I also read the paper version of the paper (at least on Sundays). Yay to that.

Glad that WaPo shamed the gubment into doing the right thing--at least part of the way.

Seems like, for now, the goal is not to get a tax refund. Eventually, the gubment might start garnishing wages or otherwise moving the process up a notch to get the $$ back.


oldtoyota

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Re: IRS going after heirs!!!
« Reply #24 on: May 01, 2014, 06:55:05 AM »
Announcement of hold on program.
[url]http://www.ssa.gov/news.htm[url]

Good news. Let's see what they decide to do. It's not like they have a very good reputation these days. But I suspect that they'll put it on hold for years, until people forget about the recent scandal, and then get the program going again.

Yeah, anyone get the feeling the government tries a lot of stuff nowadays just to see how much people will protest and just to see if they can get away with it?  Even if caught, if there isn't too much of an uproar, then people just get used to it.

Yep.  What the hell is going to be next?

Good question. Maybe they'll install naked body scanner at airports and then start feeling people's bodies if they do not agree to go through them. Nah…that would be too crazy.


arebelspy

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Re: IRS going after heirs!!!
« Reply #25 on: May 01, 2014, 07:58:27 AM »
Announcement of hold on program.
[url]http://www.ssa.gov/news.htm[url]

Good news. Let's see what they decide to do. It's not like they have a very good reputation these days. But I suspect that they'll put it on hold for years, until people forget about the recent scandal, and then get the program going again.

Yeah, anyone get the feeling the government tries a lot of stuff nowadays just to see how much people will protest and just to see if they can get away with it?  Even if caught, if there isn't too much of an uproar, then people just get used to it.

Yep.  What the hell is going to be next?

Good question. Maybe they'll install naked body scanner at airports and then start feeling people's bodies if they do not agree to go through them. Nah…that would be too crazy.

Ugh, don't want to get me started on that topic (TSA.. or NSA, for that matter).
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oldtoyota

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Re: IRS going after heirs!!!
« Reply #26 on: May 01, 2014, 09:13:58 AM »
Announcement of hold on program.
[url]http://www.ssa.gov/news.htm[url]

Good news. Let's see what they decide to do. It's not like they have a very good reputation these days. But I suspect that they'll put it on hold for years, until people forget about the recent scandal, and then get the program going again.

Yeah, anyone get the feeling the government tries a lot of stuff nowadays just to see how much people will protest and just to see if they can get away with it?  Even if caught, if there isn't too much of an uproar, then people just get used to it.

Yep.  What the hell is going to be next?

Good question. Maybe they'll install naked body scanner at airports and then start feeling people's bodies if they do not agree to go through them. Nah…that would be too crazy.

Ugh, don't want to get me started on that topic (TSA.. or NSA, for that matter).

I have a feeling we agree…=-)

Cpa Cat

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Re: IRS going after heirs!!!
« Reply #27 on: May 01, 2014, 09:22:28 AM »
Ugh, don't want to get me started on that topic (TSA.. or NSA, for that matter).

Funny/sad story -

I was in the security line at an airport (O'Hare, I think), and this old Asian lady was travelling with her grandson. She didn't speak English, so he had to translate everything for her. So what do the security people do? Randomly select him for some kind of isolated side-room search (causing the old lady to become distressed - but they wouldn't let the grandson explain it to her properly). So now it's her turn to go into the Naked Body Scanner.

But there's a problem - They must now convey to her that she has to take the Kleenex out of her sleeves. After about 10 minutes of just yelling "Kleenex" at her in English, an agent finally manages to get some Kleenex out of the old lady's sleeves. She goes into the Naked Body Scanner for a second round - but wait. There are MORE Kleenex in her pockets. Actually - it took nearly half an hour to get all the Kleenex off this lady. She somehow managed to hide an entire box' worth on her person.

I think she was punishing them - she only relinquished the final Kleenex when her grandson came back. She kept on playing the confused old granny through about eight rounds of Kleenex extraction. Then when she saw him, it was all, "Oh! Kleenex! Why didn't you say so?"

arebelspy

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Re: IRS going after heirs!!!
« Reply #28 on: May 01, 2014, 09:33:09 AM »
So sad.  Like having her walk through a metal detector wouldn't have sufficed.

Security theater at its finest.
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Nords

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Re: IRS going after heirs!!!
« Reply #29 on: May 01, 2014, 08:53:36 PM »
So sad.  Like having her walk through a metal detector wouldn't have sufficed.
Security theater at its finest.
With a captive cast and audience...

 

Wow, a phone plan for fifteen bucks!