Taxpayers shocked Social Security took money for old debts

Friday, May 09, 2014
It happened to hundreds of thousands of Americans this tax season. They found money missing from their tax refunds and were shocked to find out it was the government that took it. Several Bay Area taxpayers contacted 7 On Your Side to get some answers.

This was absolutely astonishing -- the government seems to be overstepping. Thousands and thousands of taxpayers found money gone from their tax refunds, all because of what happened when they were children. Now the Social Security administration admits it may have gone too far.

Steven Rodriguez of San Jose is still in shock. He was expecting a $1,700 tax refund. Instead, he got a check for $9. He was even more surprised to find out why.

"It's like robbing citizens of their money," said Rodriguez.

The federal government had snatched the rest of the money out of his refund. It went to pay off an old debt to the government -- a very old debt.



"They said it was an overpayment to my mom. They didn't tell me what year, how or when, why or anything else," Rodriguez said.

It was the Social Security Administration claiming it had overpaid benefits to Rodriguez's mother 40 years ago. Now it's taking the money back from Rodriguez because his mom is deceased. Rodriguez is mystified.

"How can we be responsible for something we didn't even know about?" said Rodriguez.

All he does know is his father died when he was 7 years old. His mom received survivor benefits for their two sons. Now Social Security wants some back, but can't give an accounting.

"Beyond outrage, really I was so shocked, and 30 years!" Sue Allenson of Oakland said.

Allanson found $756 missing from her tax refund. Social Security seized it without her knowledge to repay a 30-year-old debt.

"That's crazy. I mean 30 years?" Allanson said.

Allanson was left to figure it out herself. She was 5 years old when her dad died and her mother received survival benefits for their four kids. Now Social Security claims Allanson received too much, but couldn't give her an accounting either.

"The fact that this came way out of the blue is outrageous. There is absolutely no due process," Allanson said.

It turns out Social Security has gone after tax refunds of lots of taxpayers, 400,000 of them. The action was triggered by one line in the Farm Bill lifting a 10-year statute of limitations for collecting government debts.

7 On Your Side sat down with Rep. Jackie Speier, D-San Mateo, to ask if Social Security should be reopening such old cases. She told us, "To go back and claw back the money that was not legally supposed to be given to you I think is fair. To go beyond 10 years, I don't think is fair."

She said the agency should give an accounting before seizing your refunds.

"They don't play by the same rules that everyone else plays by. We already know that," Speier said.

Social Security spokesperson Lavenia Lavelle said, "We started the offset program because of the change in the Farm Bill. Everyone can get an accounting from their local Social Security offices. They may have to wait."

She said the agency sent five notices to each taxpayer before taking their funds and some folks may not have opened their mail. Or in cases like Allanson's, they were sent to a 30-year-old address.

Now, after getting a flood of complaints, Social Security has stopped intercepting tax refunds while it reviews the debt collecting effort. However, that's little comfort if your money is already gone.

"All I can do is contact 7 On Your Side because it's so crazy and outrageous," Allenson said.

Which she did and so did Rodriguez. We found out you can file an appeal to try to get your money back. Allenson isn't too confident. But Rodriguez? He's already on it.

"I just wanted to get some answers or at least stop it because it's not fair!" Rodriguez said.

One taxpayer has brought a federal lawsuit against the Social Security Administration claiming it had illegally confiscated her refund without due process.

We will be following up on this story.

If you had your refund taken from you and you want to file an appeal, here is the form.


Related Topics:
finance taxes government social security 7 On Your Side

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