Government Law

Should taxpayers pay cash owed by their parents? In about-face, US halts collection of older debts

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Taxpayers who learned they aren’t getting tax refunds because of old government debts—including debts owed by their parents—got some good news from the Social Security Administration on Monday.

The agency announced that it will halt efforts to collect government debts that are more than 10 years old, the Washington Post reports. Acting Social Security commissioner Carolyn Colvin said the agency would no longer pursue those older debts “pending a thorough review of our responsibility and discretion under the current law.”

On Friday, the Washington Post publicized the case of Mary Grice, who filed suit after the government withheld her tax refund. The tax return was withheld because Social Security overpaid survivor benefits in 1977 to someone in her family. Grice says she was informed that notice of the debt 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.

The Post said Grice was among hundreds of thousands of taxpayers being held accountable because of a single sentence in a 2008 farm bill repealing the 10-year statute of limitations to collect government debt. According to Grice’s suit, the Social Security Administration contended the change resurrected claims that had already expired.

After Grice’s suit was publicized, several taxpayers complained their refunds had also been withheld without notice to pay older debts.

Sen. Charles Grassley, R-Iowa, said Congress did authorize the government to pursue old debts, but the law “says nothing about allowing the government to offset payments from an individual to pay debts not in his or her name. It is unclear where the government has that authority.”

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