Paul L. Caron

Thursday, May 2, 2013

IRS Grabs Man's Tax Refund to Recoup Social Security's Alleged $895 Overpayment to Mother 42 Years Ago

First Coast News:  Social Security Comes After Man for $895 Overpayment They Made to His Mom:

Imagine if your parent received an over-payment from the government but decades later, the government took the money out of your tax return. Gilbert Stokes, 60, of Jacksonville, said it happened to him.

"I'm angry," Stokes said Wednesday morning. Stokes felt the same way when he received a letter from the Social Security Administration in January. "[The letter] said [SSA] was going to withhold my taxes unless I contacted about this social security over-payment," Stokes explained.

Forty-two years ago in 1971, Stokes' mother Ruby Lee received an over-payment of $895 while he was in the Navy. "My first impression was someone was trying to punk me," he said. Stokes' mother died five years ago.

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I must be pretty stupid. You can't inherit your parents' social security income, but you can inherit their social secuity debts?

Posted by: Teri | May 4, 2013 7:52:55 PM

Larry J: the statute of limitations is generally three or six years for the IRS/Treasury from the date of the return, but if you don't file a return then it doesn't close. It's too generous a standard, but it's simple. Which is why tax lawyers advise clients to file early and start the clock. A good estate/gift lawyer will document a gift and file the gift return during life, so that when the client dies years later the return is closed and generally not contestable.

Posted by: NL7 | May 3, 2013 11:43:00 AM

OMG are we living in an imperfect world? What hath God rot

Posted by: occam | May 3, 2013 9:18:03 AM

A tax refund is not and never was the IRS' money. Filing taxes is just a squaring up of accounts. If the IRS thinks that an overpayment is their money for their use as they see fit, then I shall make it a point from now on to underpay my withholding. I will make sure that I will owe a settlement at tax time, instead of look for a refund. If they want to seize something from me, let them go properly through the courts. An overpayment is an interest-free loan to the government in the first place; why should I give them a loan and then have them turn around and declare that they do not owe it back?

Posted by: Steve S. | May 2, 2013 10:29:07 PM

People need to wake up, the Obama admin is doing all myriad of thuggish means to grab and steal money to beef up department coffers. They're also seizing property and bank accounts like crazy.

Posted by: Tipper | May 2, 2013 10:01:07 PM

How can this even be legal? I know of no legal principle by which you inherit debt from your ancestors. Not to mention the whole statute of limitations thing.

This is one of those times where I wish I was independently wealthy so I could fund the lawsuit that this should bring. I am a big advocate of Instapundit's view that provable maliciousness by government officials should result in loss of immunity of office. Sue a few of these ba$tards into personal bankruptcy and maybe the rest will be a little more circumspect when they make such decisions in their *official* capacity.

Posted by: BruceC | May 2, 2013 7:42:37 PM

This JUST happened to me, My mother had an over payment over a decade ago. This month my tax return was withheld from me to recoup that payment. It is not appropriate. I don't know what recourse I have, they have even threatened to withhold from my paycheck, it really is unfathomable.

Jason, RN, EMT

Posted by: Jason | May 2, 2013 5:50:09 PM

Is everyone beginning to understand that we are now living in the age of INSANITY ?

Posted by: Lew in Colorado | May 2, 2013 5:44:01 PM

They are likely to send a SWAT team to collect and if he resists or looks at them cross eyed they'll shoot him dead (officer safety, don't you know) and then it's on to the next relative until tax justice is complete!

Posted by: hp | May 2, 2013 4:47:45 PM

When my father-in-law passed away and I was left with the task of trying to straighten out his many life insurance policies, bank accounts, etc., I found a large stack of uncashed SS checks in his desk. Many years worth, over $100k. He didn't need the money, and my mother-in-law said they only cashed them when they needed some quick money for a purchase, and then only the very top check. I called the SSA to see what to do with the checks, and they told me that they became worthless at his death. I believed them, and so they were shredded. It appears to me that if an uncashed check to a legal recipient becomes worthless at the moment of that recipient's death, so should any overpayment. I guess when you are talking about the SSA, the only winner is the government.

Posted by: Diggs | May 2, 2013 4:18:19 PM

Isn't there supposed to be a statute of limitations on this sort of thing.

Posted by: WillBest | May 2, 2013 2:01:23 PM

The very same IRS that now runs your healthcare.

Posted by: Ed | May 2, 2013 1:31:02 PM

Don't worry, the IRS will be much more fair when enforcing the Affordable Health Care Act.

Posted by: willis | May 2, 2013 12:45:25 PM

Unbelievable. "Going Galt" looks better all around every single day.

Posted by: Texas Liberty Guy | May 2, 2013 12:42:46 PM

The "SSA" is taking the money, but more importantly one or more people, though I use the term advisedly, are doing it.

Find them, publish their names, shame them, try to get them disciplined or fired. Sue them, sue the SSA, sue everybody involved.

Lefties win because they are prepared to do these things. We lose out of sheer laziness and cowardliness.

Posted by: Fred Z | May 2, 2013 12:33:19 PM

After my mom died about 30 years ago, I kept the check she received not realizing it was for the month after and not before. I promptly notified them of her death. Next month I received another check. I wrote in HUGE letters across the check "deceased." The checks kept coming. I kept sending them back. Finally I gave up and used them for bookmarks.

Several years later they came looking for the money from the checks that were never cashed PLUS all the ones I had sent back.

I retained an attorney and dealt with the Secret Service (they were great and were on my side.) Meantime, I was still receiving checks. It took the Secret Service about 6 months to make the flow of checks stop.

It took six years to make the IRS go away. By then I was on first name basis with Secret Service agents in three cities, who hate the IRS as much as we do.

The IRS considers the money "gone" even if the checks are never cashed. Who in hell keeps books like that???

Posted by: Adrienne | May 2, 2013 12:06:39 PM

Interesting timing. Drudge has a link to this story about the IRS going after a man claiming he failed to file a gift tax return in 1972. I thought we were only required to keep tax records for 7 years. How can the IRS go back that far in pursuit of (alleged) back taxes?

Posted by: Larry J | May 2, 2013 11:58:19 AM

It's bad enough your estate maybe subject to tax after your death, at least your heirs will receive something but the idea of inheriting someone else's tax deficiencies without any of the benefit of inheriting the assets is simply amazing.

Posted by: cubanbob | May 2, 2013 11:55:28 AM

Pretty easy solution. Cut withholding to to -$895 for this tax year and then don't pay the $895 on your 1040 bottom line. Offset is for everybody, isn't it?

Posted by: Duncan Frissell | May 2, 2013 11:54:19 AM