3 On Your Side: Government Seizing Tax Refunds
By Jim Donovan
PHILADELPHIA (CBS) — They were expecting a tax refund, but instead are left empty handed.
The government recently seizing refunds to pay off old social security debts.
As 3 On Your Side consumer reporter Jim Donovan finds some involve of the debts are decades old and involve children at the time.
Like many Americans Diana Vonderacht was looking forward to getting a tax refund.
“It was spent. I was going to pay down a bill with it,” said Vonderacht.
But she didn’t get the money. Her $500 Federal refund was confiscated before Diana even knew there was a problem.
“I get a letter from the IRS saying an agency, a government agency, collected it as a debt,” said Vonderacht.
That agency was the Social Security Administration which claimed it had overpaid death benefits to Diana’s family in the 1970’s.
“My father had passed away when I was 14, so my mother collected Social Security for my brother and I,” said Vonderacht.
“My mother was receiving these checks. I can’t tell you if that money went into my care,” said Vonderacht.
Diana’s refund had been taken without notice for a debt that wasn’t hers. When she sat down with Social Security she asked for proof.
“I asked them to give me checks with signatures I can show them I didn’t sign these checks. They don’t have any checks. They have no proof and I said how can you say it’s mine? And he goes, I can assure you the money was spent,” said Vonderacht.
And Diana isn’t alone.
“To be honest, I was ticked off,” said Mary Grice.
Grice had her state and federal refunds totaling $4,500 confiscated after Social Security said it overpaid benefits to her family after her father died when she was five.
“How can they intercept of take my funds without my first being notified,” said Grice.
Her attorney, Robert Vogel, has filed a lawsuit.
“The government should not be in the business of trying to collect 30 year old debts from people,” said Vogel.
This tracking of old debt stems from a change included in the 2008 farm bill, allowing the government to collect debts more than 10 years old.
The Social Security Administration says four thousand taxpayers were overpaid by up to $714 million dollars.
So far, $55 million dollars has been collected mainly by having the Treasury Department seize tax refunds.
Diana appealed but got nowhere. But she intends to keep fighting to get her money back.
“It’s just unethical, you don’t do that,” said Vonderacht.
Earlier this week the Social Security Administration announced it was suspending this program while a review is conducted. The agency recommends that taxpayers who have had their funds seized visit a field office to request a waiver for the overpayment even if a past appeal was denied.