Legal Aid Sues IRS Over Refunds

John Ransom
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Posted: Mar 04, 2015 12:01 AM

A man in New Jersey was indicted for cash and $243,000 with the Social Security checks over 29 years, according to the attorney general's office.The U.S. Attorney General's Office announced that Nicholas A. Severino was indicted by a state grand jury for theft. 

An investigation by the Division of Criminal Justice and the Office of the Inspector General of the U.S. Social Security Administration found that Severino's father died in 1984.

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Lawyers with the Legal Aid Society have filed a suit in federal court against the IRS for holding onto tax refunds to make up for over payments of sometimes decades ago Social Security payments. 

They are seeking class action status. 

While the Social Security administration says that they have suspended the practice of going after tax refunds, the lawyers claim that the government is still going after tax refunds that of already been identified as belonging to the supposedly over-compensated Social Security beneficiaries.

An audit in New Jersey found that dozens of people who claim lottery winnings in that state used dead people's Social Security numbers for tax purposes when claiming the prize. 

The period covered from July 2013 to July 2014. And included prizes from $600 and up. 

The report says that it cost the state nearly $1 million in taxes.