Tax Refund Siezure

Hank  Adler
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Posted: Apr 15, 2014 9:10 AM
Tax Refund Siezure

As has been widely reported, a single sentence in the 2008 Farm Bill, Public Law 110-246, is said to be responsible for the Internal Revenue Service seizing refunds from the children of taxpayers who the Social Security Administration says were inadvertently overpaid in the 1960s and 1970s. Are they kidding?

The story is ugly in so many ways. Of course, no one is claiming credit for the change in the law that the Internal Revenue Service and the Social Security Administration is relying upon to seize taxpayer refunds. But, of course, there is the actual language in the bill for which that the author must take responsibility. The sponsor of the 2008 Farm Bill was Congressman Collin Peterson. There were no co-sponsors; this bill belongs to Mr. Peterson. Of interest and perhaps in defense of Mr. Peterson, the magic language was added to his bill after passage by both the House and the Senate; this writer has no idea by who or how. But how can that be?

Speaker Pelosi once famously told us “You need to pass the bill to find out what is in it.” One wonders if any Member of Congress even knew what was in this “farm” bill when it was finally passed. Of note, the Farm Bill of 2008 was passed over President Bush’s veto. There is a message in this. The bill was important enough to override a presidential veto, but not important enough to be thoroughly studied before the vote.

It gets worse. The Internal Revenue Service and the Social Security Administration are relying solely on the Table of Contents of Public Law 110-246. The Table of Contents states: “Section 14219. Elimination of statute of limitations applicable to collection of debt by administrative offset.” The body of the bill contains no such section, the bill itself goes from section 14217 to 15101. The Congressional Summary merely repeats what is in the Table of Contents.

The collection process completes the trifecta. The position of the government is that the child of the parent who received the refund directly or indirectly benefited from that payment to the parent and therefore must repay the incorrect payment, even if the payment was made forty years ago. This is regardless that the government has not the slightest idea how the money was spent and cannot possibly prove that there was a benefit to the child or the amount of that benefit.

We are left with way too many questions: (1) On the legal side of the coin, can Congress really retroactively waive a statute of limitations? Doesn’t that in some way violate the contract in the Constitution that we will not change laws retroactively? Isn’t this an ex post facto law? Is a listing in the Table of Contents of a law really a law if there is nothing in the body of the law? Can I be responsible to repay a payment incorrectly made to my father? And of course, where were the Courts, was there any due process in seizing a tax refund because a check was incorrectly sent to a third party? (This is when I wish I went to law school.) (2) On the political side of the coin, is there any legislation which the Congress is reading and studying before voting? Should not at least the author of a bill have known what changes were being made to his or her bill? How could the Congress of the United States of America pass such a law over a Presidential veto without studying every verb and consonant, including the Table of Contents?

So here it is: Dad received an incorrect payment from the Social Security Administration in 1971. He took the money and went to the racetrack. He lost his bet on a horse named Fire My Congressman and the Internal Revenue Service has taken his daughter’s tax refund in 2013 to get their money back. Really?