Government Law

Taxpayers held responsible for parents' debts due to single sentence in farm bill

Hundreds of thousands of taxpayers across the country are learning they won’t get their expected tax refunds this year because they are being held accountable for old debts—in some cases, debts incurred by their parents.

The taxpayers are being held accountable because of a single sentence in a 2008 farm bill repealing the 10-year statute of limitations to collect government debt, the Washington Post reports. The government has recovered $424 million since it began an effort to collect old debts in 2011.

Mary Grice was among those who got bad news from the IRS, the story says. She learned that the government had seized her state and federal tax refunds because Social Security overpaid survivor benefits in 1977 to someone in her family after her father died. Social Security can’t identify just which family member received the overpayment under her father’s account number. There were six beneficiaries.

Grice claims in a lawsuit (PDF) filed in federal court this week that the government violated her due process rights by holding her responsible for the nearly $3,000 alleged Social Security overpayment. According to the suit, the Social Security Administration issued a new regulation in 2011 removing the 10-year-statute of limitations, contending that the change resurrected claims that had already expired.

A Social Security spokesperson told the Post that it makes multiple attempts to contact debtors before taking any money from taxpayers. Grice says she was told her notice was sent to a Post Office box she rented from 1977 to 1979, even though the agency manages to send benefits statements to her current address.

“Their record-keeping seems to be very spotty,” she told the Post.

We welcome your comments, but please adhere to our comment policy and the ABA Code of Conduct.

Commenting is not available in this channel entry.