Across the nation, hundreds of thousands of taxpayers who are expecting refunds this month are instead getting letters that the government has confiscated their check.
The Treasury Department has intercepted $1.9 billion in tax refunds already this year -- $75 million of that on debts delinquent for more than 10 years, said Jeffrey Schramek, assistant commissioner of the department’s debt management service. The aggressive effort to collect old debts started three years ago -- the result of a single sentence tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.
No one seems eager to take credit for reopening all these long-closed cases. Social Security also has been going after overpayments that it has discovered many years after the fact.
A Social Security spokeswoman says the agency didn’t seek the change on the 10-year statute of limitations; ask Treasury. Treasury says it wasn’t us; try Congress. Congressional staffers say the request probably came from the bureaucracy.
The only explanation the government provides for suddenly going after decades-old debts comes from Social Security spokeswoman Dorothy Clark: “We have an obligation to current and future Social Security beneficiaries to attempt to recoup money that people received when it was not due.”
Since the drive to collect on very old debts began in 2011, the Treasury Department has collected $424 million in debts that were more than 10 years old. Those debts were owed to many federal agencies, but the one that has many Americans howling this tax season is the Social Security Administration, which has found 400,000 taxpayers who collectively owe $714 million on debts more than 10 years old. The agency expects to have begun proceedings against all of those people by this summer.