Debt

Uncle Sam Revives Feudal Practice to Collect From Children of Debtors

|

Uncle Sam
DonkeyHotey/Foter

Holding children responsible for the debt incurred by their parents is a feature of historical feudalism and a few modern third-world shitholes.

Developed countries, by and large, assume that a debt dies with the person who willingly incurred it, or at least stops with his or her estate. "By and large," I write, because the U.S. government has broken with centuries of tradition holding individuals responsible for their choices, opting to withhold tax refunds from children whose parents incurred vague and often ill-documented obligations to the feds.

Writes March Fisher of The Washington Post:

A few weeks ago, with no notice, the U.S. government intercepted Mary Grice's tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government—a very old debt.

When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them.

Now, Social Security claims it overpaid someone in the Grice family—it's not sure who—in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary's money, rather than her surviving siblings', is a mystery.

Across the nation, hundreds of thousands of taxpayers who are expecting refunds this month are instead getting letters like the one Grice got, informing them that because of a debt they never knew about — often a debt incurred by their parents—the government has confiscated their check.

The new multi-generational debt collection practice required a two-step policy change. One was the elimination of the 10-year statute of limitations on debts to the federal government. The other involves the Social Security Administration insisting that if tiny tots indirectly benefited from public assistance collected by adults decades ago those now-grown ex-tots are responsible for any overpayments the feds may claim.

The elimination of the statute of limitations may, on its face, allow the government to go after individuals responsible for incurring debt, but the longer time horizon means accurate records can be hard to come by. According to Fisher, "Social Security officials told Grice they had no records explaining the debt."

How do you collect a debt that you can't prove exists? Through the sheer grinding weight of the state, of course.

Going after the next generation—which never made the decision to incur a debt to begin with—really is a massive break from previous policy.

Most financial websites advise heirs that they are responsible for parents' debt only if they cosigned loans, held joint accounts, or shared community property with the deceased. Beyond that, the debt adheres to the debtor's estate and may devour any inheritance. The estate belonged to the debtor and passes to heirs only after bills are paid. But the debt stops there.

The Federal Trade Commission (FTC) likewise asserts, "family members typically are not obligated to pay the debts of a deceased relative from their own assets."

The estate of the deceased person owes the debt. If there isn't enough money in the estate to cover the debt, it typically goes unpaid. But there are exceptions to this rule. You may be responsible for the debt if you:

  • co-signed the obligation;
  • live in a community property state, such as California;
  • are the deceased person's spouse and state law requires you to pay a particular type of debt, like some health care expenses; or
  • were legally responsible for resolving the estate and didn't comply with certain state probate laws.

The FTC should send a memo over to Treasury and the Social Security Administration to clue them in on modern debt practice. Sure, the government is broke and scrambling for any cash it can find. But reviving feudalistic practices to visit the debts of the parents on sons and daughters should involve perhaps a tad more discussion. Especially if the feds hanker to take the next logical step into debt bondage.

Update: After a little embarrassing coverage, the Social Security Administration suspended efforts to collect old debts on April 14. The official statement from Carolyn W. Colvin, Acting Commissioner of Social Security, carefully stays clear of any mention that they were often trying to collect these debts from the next generation.

I have directed an immediate halt to further referrals under the Treasury Offset Program to recover debts owed to the agency that are 10 years old and older pending a thorough review of our responsibility and discretion under the current law to refer debt to the Treasury Department.

If any Social Security or Supplemental Security Income beneficiary believes they have been incorrectly assessed with an overpayment under this program, I encourage them to request an explanation or seek options to resolve the overpayment.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

129 responses to “Uncle Sam Revives Feudal Practice to Collect From Children of Debtors

  1. Hopefully they apply estate taxation to that debt, as well. Death is no excuse.

    1. Think of the late fees!

      1. Excuse me, sir. Your great-grandmother checked out a copy of the Bobbsey Twins in 1905 and never returned it. You’ll now be constructing a new wing for our library.

    2. Bill Clinton started the legal precedent to this, by the re-institution of droit du seigneur http://en.wikipedia.org/wiki/Droit_du_seigneur

  2. Schmuck Chumer was for the Kochtupus! before he was against it.

    1. Wht in the hell would they donate to Schumer? I guess you gotta greas all the palms.

  3. folks, take out a reverse mortgage. if Uncle Sam is going to seize your estate anyway, leave him a house with a lien on it.

    1. But then they’ll just go after your family to pay off the lien.

      1. Exactly. I don’t want my kids to start their lives with a nice lesson in asset seizure.

        1. the house pays off the lien. the point is to seize the equity for yourself instead of leaving it to the tender mercies of ever evolving prog tax and estate policy.

          1. Yeah, I get it. I’ve actually been working on estate planning lately. What a clusterfuck! I’m thinking that slowly transferring everything to the kids and dying broke makes the most sense.

            1. yep. true story: my grandfather could not gift me above, I don’t even remember, what it was. that’s taxable.

              but he could buy full cost 1st class airfare to Asia and have the funds refunded to .. well, never mind where.

              1. Ah, now that’s the kind of estate planning I can understand. Thanks, NoVA!

            2. Mickey Rooney managed to do that, leaving behind an estate worth all of $18,000. Of course, he got swindled by a stepson, too, as a consequence of marrying a seventh or eighth time.

      2. Serves the little fethers right. Shitting all over the place. And when I say go to sleep you had best motherfucking GO. TO. SLEEP!

    2. folks, take out a reverse mortgage.

      errr….

      No.

      Reverse Mortgages are a scam.

      Better to just sell your house and rent.

      1. Yes I’m a mortgage broker, but you’re full of shit. Reverses aren’t for everyone, but if you’re equity rich and cash poor, and YOU LIKE YOUR HOUSE, why would you sell and rent some shithole instead?

        1. Yeah, Corning is kind of a moron, just ask him about the big bang.

          1. The big bang is bullshit.

            But belief or none belief in it has zero stakes.

            You probably should not judge a person’s intelligence based on something as trivial as their taste in ice cream or creation theory.

            Now if I like deep dish that would be a different story. Feel free to call me a moron over that.

            1. Sorry, creationism isn’t a theory, it’s an idea or belief. If you can’t test it, it isn’t a theory. That word is bandied about too often, and it needs to mean what it actually means. I’m still bitter about “liberal”, so forgive me if I wage a one-man pedantic crusade when it comes to this word.

        2. Most of the time, Corning is full of shit. The rest he’s just obnoxiously incorrect.

          1. When the hell did I get a fan club?

            I must inform Epi and warty that I have joined the big boys now!!!

            ….

            Corning, cooler then all you bitches!!!

        3. Since you’re actually in the business, let me ask you an honest question: is there a life estate option for those who might outlive a reverse mortgage, or do they just need to be ready for a new contingency?

          1. Another equally good question is to ask; what if you die early?

            You won’t see the money obviously cuz you are dead.

            Also if you like your kids and want to leave them something you can forget it.

            It is near impossible to get out of a reverse mortgage and the mortgage is discounted for the value of living in it….if you are dead then that value is lost to the bank cuz you are not living in the house anymore.

            If you hate your kids then you should still sell the house and rent and give your inheritance to some charity if you like.

            1. I’ll wait for the actual broker’s answer, thank you.

            2. And if you don’t have kids or heirs?

        4. YOU LIKE YOUR HOUSE

          I like IBM. But if I lose money by owning the stock i should sell it.

          Reverse mortgages are a scam.

          Either you die late and are homeless or you die early and you lose your equity.

          I suppose if you plan on killing yourself on the date you reverse mortgage is fullfilled….

          I suggest you get out of a business that requires someone off themselves in order for them to see a full return on their investment….kind of scumbagish to stay in profession like that.

          rent some shithole

          Why would you rent a shithole over a none shithole? I would rent a nice place with little maintenance.

          you’re full of shit.

          By the way, go fuck yourself.

          1. obviously you know nothing about it. it’s a loan with interest, that’s it. and you can’t outlive it unless you choose to pay it off before you die. the rate is a little higher than a regular mortgage, but you don’t make payments and can live in the house until you die. and the 5% rate available now will look great in a few years. now if you were hoping to inherit a house free and clear and instead granpa spent the equity, you might think it was a scam.

            1. it’s a loan with interest

              It is a loan you can’t get out of with interest with the cost of living in the house taken out.

              If you die before it is fulfilled all that value you would have gotten by living in the house is gone gone gone.

              What you are doing is paying rent in advance (by taking the value out up front when the loan is made) and if you die the money does not come back into your estate.

              1. “It is a loan you can’t get out of with interest with the cost of living in the house taken out.”

                HECMs have payoffs like any other loan and no prepayment penalty. all interest is earned. you seem to have a lot of misconceptions. educate yourself.

                1. you seem to have a lot of misconceptions. educate yourself.

                  You are officiating. Either you don’t understand or you are lying to cover it up.

                  if i buy a house i pay the whole price of the house.

                  Like you said a HECM is like a loan but the bank is the one taking out the loan and buying the house.

                  Because the seller is going to live in the house the bank pays less money then a normal buyer would pay for the house. loan or no loan.

                  And as I have said the seller living in the house will more often then not die before they have realized that trade off of living in that house rather then getting the full value of the house.

                  Understand now? or are you going to pretend to not understand and keep defending these scams?

            2. “What you are doing is paying rent in advance (by taking the value out up front when the loan is made) and if you die the money does not come back into your estate.”

              how on Earth is receiving money the equivalent of paying rent? It’s closer to collecting rent. but you are correct that money you took and spent doesn’t add to your estate’s value.

          2. “Either you die late and are homeless or you die early and you lose your equity.” is incorrect.

            please explain how it’s a scam.

  4. Do we even have tax laws any more, or is the IRS now like Biblical tax collectors who show up at your house and take whatever they want?

    1. Seems that way. Although you could say the same thing of most of the government bureaucracy these days. A lot of laws get passed with vague statements in them and a further note authorizing the “civil servants” to come up with “rules” to make the laws work.

      As someone here pointed out a few months back, Orwell’s idea of a jackboot stomping on a face for eternity is outdated – it will instead by a bureaucrat slowing killing you with regulations.

      1. That’s why I say ‘Brazil’ was a documentary.
        Harry Tuttle died under a mountain of paper.

      2. If it’s so outdated then why the hell is every community in the US swarming with jackboots?

  5. I motherfucking told you this was coming.

    Medical debt, student loans, social security “overpayments” – there will be more added to this list.

    It’s coming.

    Economic systems without manageable systems of insolvency evolve into systems of debt peonage. Always. Everywhere. Without exception.

    Debt to the state has always been exempted from our bankruptcy law. So the key is simply to generate enough debts to the state – or for the state to take over formerly private debts and make them nondischargeable.

    Make them heritable, too, and – checkmate.

    1. ^This. Additionally it sure sounds pretty ex-post facto to me. They’re creating debt obligations retroactively, even in the absence of an agreement between the principals.

      Absolutely abhorrent, but that’s what I’ve come to expect from this kleptocracy.

    2. You are exactly right. The question is will people put up with it.

      I don’t think society will voluntarily put itself in intergenerational debt slavery. Sure, they might fuck some small minority into that and already are in the form of student loans. Get enough people with this kind of debt and they will just either refuse to pay it in such large numbers it is impossible for even the government to collect or rise up in either electoral or literal revolt and put a stop to it.

      If you don’t believe me, think of how appealing free shit is. If you can get elected promising free shit, you can sure as hell get elected promising to forgive everyone’s debts that they can’t pay.

      1. With medical debt, I predict they will attempt to divide the serfs by generating resentment over “free riding”.

        “The reason your Obamacare taxes are so high is because other people refused to buy insurance! That debt should stay in place until it’s paid off! Otherwise those ‘free riders’ will get away with it! And we’ll have to charge you even higher taxes!’

        If you spread the debt bondage around wide enough – and then play the medical debt peons off against the income tax debt peons off against the student loan debt peons off against the regulatory fine peons ad infinitum, you can probably prevent the formation of a critical mass willing to tear the whole structure down and start again.

        Especially if you offer selected, favored peons “exemptions” and “adjustments”: “Oh, you worked as a teacher or a cop? YOUR DEBT IS FORGIVEN! Bask in the glow of our magnanimity!”

        1. Especially if you offer selected, favored peons “exemptions” and “adjustments”: “Oh, you worked as a teacher or a cop?

          Yeah, they’ve already started doing this.

        2. The reason your Obamacare taxes are so high is because other people refused to buy insurance!

          That doesn’t seem to be selling very well these days. The problem with doing that is that the Progs have spent 70 years making sympathy for the poor and unlucky the highest end in society.

          The societies that had inter generational debt and debtors’ prisons and things were extremely puritanical and values oriented. You can only sell putting people into jail or saddling them forever with debts if you have a society that has an extremely strong work ethic and sense of duty.

          Well, the progs destroyed most of that in society. In 1920 the “we need to do something about these free loaders” argument would have sold. No way in hell will it now. People are too habituated to feel bad for and want to help the less fortunate.

          You are dead on in describing what the Progs are going to try and do. It will in my opinion fall completely flat as Progs run head long into the effects of their own propaganda. No way in hell are they going to talk this society out of not forgiving sick and poor and even middle class people’s debts.

          1. The problem with doing that is that the Progs have spent 70 years making sympathy for the poor and unlucky the highest end in society.

            I guess I’ll never achieve the highest end, then…most chronically poor people I’ve dealt with got there by being lazy and repeatedly making poor choices. Can’t really feel sorry for them.

        3. Your new caste system in a nutshell.

      2. “The question is will people put up with it.”

        The rubes and the proles? You betcha. And they’ll still get all teary-eyed when someone reads from Jefferson on the 4th of July. Double-think comes naturally to them.

        1. But I thought they loved free shit? You mean they don’t love free shit or will somehow not demand their debts be forgiven?

      3. “I don’t think society will voluntarily put itself in intergenerational debt slavery”

        Society has already done it – at the state level.

        There are state laws on the books in about 30 states called “filial responsibilty” laws that require children to pay for their parent’s care.

        See this:

        http://www.forbes.com/sites/ca…..home-bill/

        I don’t see how such laws could be constitutional as they essentially institute a form of slavery. And slavery is prohibited by the 13th Amendment. It’s also a violation of 5th Amendment private property rights by taking an individuals property to give to another.

    3. One other thing. The upshot of such a revolt or mass refusal to pay the debts would be the complete collapse or our tax system. Our whole income tax system depends upon people voluntarily complying. The IRS can’t audit everyone or even a tiny percentage of people. If even a large minority of the country one year decided to fill out and file their taxes such that they had a zero tax liability, the IRS would be like Kevin Bacon in the final scene of Animal House. This is basically what has happened in Greece.

      1. Not really ‘voluntarily complying’. Its a bitch to get no withholding from pretty much *any* business you work for.

        They don’t have to get *you* to send in the check, they only have to threaten the company’s leadership and those guys could give a fuck – they’ll roll over on their own grandma’s just to stay in business.

        1. But the system is automated. If I fill out my taxes such that I get all of my withholding back, I will get it back unless the IRS audits me and maybe even then, though obviously they will take it back after they audit me.

          The whole system works because people for the most part honestly settle up at the end of the year. If people stopped doing that, the IRS couldn’t audit them all. They would have to either just stop sending refunds, which would cause a revolt and effectively end the tax system. Or they could do nothing and refund their entire tax revenue away.

          Even if people didn’t revolt, not giving refunds would also end the tax system as it no longer was uniform or was able to recognize the various deductions and such available.

          1. I have wondered about this as well.

            I think the true endgame is the cashless society.

            Once all transactions take place via regulated banking entities, I don’t need the peons to fill out income tax forms any more.

            Give me all the card swipe transaction data and all the deposit data and I will tell all of you what your refunds are or how much you owe.

            Or I might cut out the middleman and not bother telling you. If you owe something, I’ll just take it.

            1. I don’t think a cashless society would get around the problem. You still have to get people to pay. You can do that with withholding but unless you are going to go to a flat tax system that offers no exemptions or deductions such that there is no reason to settle up at the end of the year, you still have to have people file tax returns and by extension depend on their honesty in doing so.

              Moreover, any system depends on the honesty of businesses. Businesses have just as much of an incentive to cheat as the individual. If cheating ever got so endemic that getting caught was no longer a deterrence, businesses would cheat for their employees as a way to attract better employees. Once that happened, they all would start cheating or face not being able to hire or keep good employees.

              You would have to have one hell of an automated cashless system to get around that. I doubt our government is up to such.

              1. Well, every business entity that files a tax return declares their business activity type.

                With a table with every FEIN and their IRS business activity type, a join to a table containing the FEIN of every bank account, a join to a table with the FEIN of the entity controlling every swipe terminal, and a join to a table containing every transaction and the sending and receiving party FEIN, I could determine exactly how much you made during the year and exactly how much you spent and on what.

                Your only way around that would be barter, since cash would be gone.

                I’d know your income, and I’d know your valid deductions. Without you telling me or filing anything.

                1. You could do that Fluffy, but you would still play hell enforcing it against everyone. If you had all of that information available, you still would have no way of knowing if I lied about something without cross checking it. Doing that would require a system that had complete knowledge of every transaction done both here and abroad.

                  No doubt these people have we dreams thinking about such a system, but it will never happen. Even if you get to “cashless”, that is not the same as cashless attributable to the person using it. To get there, you would have to eliminate all forms of transactions that didn’t involve personal identification, that means I couldn’t so much as give someone a gift card unless it had their name inscribed on it and it was registered to the government.

                  You will never get to a granularity that good. And you are also never going to have a completely cashless society. The only way you could stop me from declaring my entire taxable income in charitable donations would be to audit me or have a database of every charitable donation made in the world that you could cross check my claim against by machine such that I never get credit for it even if I am not audited.

                  Such a system while their goal, is unlikely ever to exist.

              2. I doubt the government could build that too. Especially because likely it would involve a web site.

                1. Damn, beat me to it.

      2. “Our whole income tax system depends upon people voluntarily complying.”

        Yeah, comply or volunteer to have your assets seized and go to jail. That kind of voluntary.

        1. That only works if you think there is some likelihood that it will actually happen. The moment non compliance hits a critical mass that there is so much of it people view their chances of being caught are low enough to justify the risk, the whole system goes up in smoke. 99% of tax payers don’t get audited and would get away with cheating if they chose to. If enough of them ever chose to cheat, the whole system would collapse.

      3. If even a large minority of the country one year decided to fill out and file their taxes such that they had a zero tax liability,

        40% already pay no income tax.

        1. They do it legally. What if the other 60% decided to just pretend they didn’t owe?

          1. This is a democracy, there only need be 50% plus 1.

            You know the future step: heroes need not file income tax returns.

    4. for the state to take over formerly private debts and make them nondischargeable.

      Make them heritable, too, and – checkmate.

      Has someone made a free state in the middle of the Pacific ocean yet?

      1. I’m seriously considering moving to Chile.

        1. Everyone come on the 2015 Reason Cruise. We’ll commandeer the ship, sail to some uninhabited island, and create our own country. I call President.

          1. I got dibs on Deputy Undersecretary of Orphan Importation.

        2. You need a roommate? Chilean women are smoking hot and everyone I’ve met stateside is a hardcore anti-commie.

          1. I don’t. Because you can get an apartment in Vina Del Mar with a great view of the ocean from your balcony for about 650 USD.

            http://www.wunderground.com/cg…..ogleonebox

            I’m in the wrong country.

      2. Let’s just try to work a deal with Costa Rica. It looks like a nice place to start a libertarian utopia.

  6. You know what she should do. She should vote for someone who believes in more power and more money and more control to the state. Because you know Korporations and Kochtopus.

  7. This is just lawlessness. The Social Security Administration’s interpretation that anyone who benefits from overpaid benefits is subject to repay them, is totally contrary to the law and would never stand up in court.

    They know it wouldn’t. They don’t care because they know most people don’t have the money to go to court and fight the charge. Our judicial system has effectively stopped functioning in small cases. If the government takes a few thousand of your dollars unjustly, what are you going to do about? Spend $25,000 going to court and getting your money back? You have no recourse and effectively no access to the court system as long as they don’t throw you in jail, you are not wealthy, and they don’t take everything.

    Maybe if we had a Congress that was interested in actual oversight of the executive, this shit would stop. The easiest solution to this is Congress passing a bill stopping this and telling them to pay the money back. Good luck with that.

    And remember, Obama cares about you. That is why half of these people voted for him. They thought he really cared about them. He cares so much he is letting the SSA collect debts from children.

    1. Elderly children in this case.

      Its a fucking Brave New Bizarro World meets

      1. You’re typo just inspired my handle!

  8. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery.

    Look at Mary’s charitable donations.

    1. She’s a black woman. I think in this case, we can safely assume that that wasn’t the directive.

      1. Exemptions to follow

      2. So, a 98% chance she voted for Obama.

  9. This isn’t new:

    Thanks to the “Food, Conservation and Energy Act of 2008,” anyone overpaid by a federal agency, at any time in their life, can now be tracked down and put on the hook for debts that are decades old.
    For Bridget Galazkiewicz of Minooka, the unexpected tax grab began in the form of a mysterious message from the IRS she received the day after she expected her tax refund.
    “If you haven’t already seen a letter, expect one,” she said of the message.
    Soon thereafter, a letter arrived from the Department of the Treasury announcing the government had seized all $1,200 of her 2012 return for a debt about which she said she knew nothing.
    There was no warning letter or call, just the seizure notice.

    http://www.nbcchicago.com/inve…..z2yaizQwZo

  10. This is another example – as if one were needed – why withholding is evil.

    Fuck the government.

    1. Milton Friedman is rotting in hell for this.

  11. Time for a RulingClassectomy!

    1. Nice.

  12. I don’t know why this would surprise anyone. The state is voracious and always, always needs and wants more. As it grows, it will take more, and the excuses of why it takes your money will grow flimsier and flimsier. It takes because it can; because it has a monopoly on force.

    If you want government, even a minarchist one, this is what you get eventually. This is the logical conclusion of a monopoly on force. I hope you’re not too attached to your 401k’s, because those will be coming under fire soon.

    1. The tax collectors in Bourbon France were so rapacious they would tear apart a farmer’s house looking for a chicken after noticing a stray feather.

      Governments are rapacious and evil and no amount of money will ever satisfy them.

      1. That did’t end well for the Bourbons.

        When people are oppressed to the point that too many have nothing to lose, things happen.

        1. But, but….ROADZ!

          1. I live in Chicago. We’ve been doing without roadz since December.

    2. The concern over 401ks is even more pronounced when you realize that very few in my generation are making significant contributions to their 401ks (given the pittance left over after sending four tithes to the government along with general cost of living).

      1. Unless there is employer matching a 401K is generally a suckers game; th efees are higher, and you will be taxed on the distributions at the tax rate in place when you retire.

        How many people think the government is going to maintain tax rates at or below current rates?

        1. Exactly. That is why I have never invested in IRAs. All an IRA does is defer your taxes now until when you retire. I don’t know about you, but I think saying taxes will always be higher in the future is a good bet. So why defer them?

          I don’t even trust Roth IRAs. Sure they say they won’t tax that money. I see no reason to believe them when they say that. Maybe they won’t steal my savings. I don’t know. I have little doubt that they are going to try and have at least some chances of succeeding. For this reason I discount the amount cash retirement savings I do accordingly. Maybe I will get to keep that money, maybe not.

          1. This is correct, a standard IRA is simply a bet that taxes will be lower on you when you retire than they are now. It’s not necessarily a sucker’s game, though; chances are that after you retire your distributions will be significantly less than your salary is now, so while the tax rates overall may go up you will be in a lower bracket.

            1. Wrong.

              You assume tax brackets won’t change.

              Your distribution will be lower in relative terms, but will be higher in nominal terms. So you will be in a higher bracket.

              Now take that nominal increase and add in the probability that tax brackets will change.

              1. As an example, I paid $600 in rent on a 2-bedroom place 25 years ago; I made 26K annually.

                The single-room-occupancy transient hotel rent will be $1800 a month in 2029. I will probably have to take 32K in distributions by then to live in that. Government does not take inflation rates into account when computing capital gains.

          2. As I pointed out the other day regarding Social Security, the government has changed the rules on existing schemes dozens of times. This is what people who claim to be intelligent call “responsible government”

            The rules for 401K and IRA’s are guaranteed to change.

          3. I put money into my 401(k), but only up until the $17K you get pre-tax.

            I do not own a home, so I do not have any other way of getting deductions. The $17K I put in my 401(k) each year probably pushes me into a lower tax bracket.

            When I buy a house and am making mortgage payments, then I might reduce my contribution and put it into paying off the house faster.

        2. My employer (state university system) has a unique approach. When you accept employment, you are automatically enrolled in the 401(k) equivalent. Your only choice is at what level of contribution. There is no opt out option.

          That said, the match is pretty good although your only fund choices are TIAA-CREF & Fidelity.

          1. A lot of employers are that way. That doesn’t mean you have to max your contribution. You just view that money as found money if you ever see it.

            1. Found money? That ought to kick in a capital gains tax and an inheritance tax.

    3. Real soon:

      http://www.foxbusiness.com/on-…..-your-401k

      And this:

      http://www.nationalseniorscoun…..&Itemid=62

  13. “Social Security officials told Grice they had no records explaining the debt.”

    How do you collect a debt that you can’t prove exists? Through the sheer grinding weight of the state, of course.

    You have to prove that it doesn’t exist. That has always been the case with the IRS; guilty until proven innocent.

    1. Works with the states too.

      Massachusetts won’t give me a drivers license because they claim I didn’t pay my excise taxes from 94 – 99. Forgetting the fact that I didn’t live in Mass in 99 (I moved to Atlanta in June 98) I find it highly unlikely that those bills were unpaid because they ranged from $5 to $36 and given that you cannot renew your license with unpaid excise taxes and I had to renew mine in 1997. So if I didn’t pay in 94, 95, and 96 how did I renew my license in 97? Oh yeah, the other interesting thing is all of these “unpaid taxes” were magically attached to my license on the same day in 2006

      However the state has it set up so that there is no appeals process, the only way that I could fight it would be to somehow come up with some documentation (I don’t even remember what bank I banked with back then) that I paid the bills and then sue the state somehow (if even that is legal) and spend 20 times the $800 they say I owe after interest and penalties.

  14. I like how only people who are getting money back from the US government are being collected on.

    If you get a tax return it would only be because you hardly make any money.

    This collection is only going after the working poor.

    Is “regressive debt collection” a thing?

    1. Not exactly. Its money they’ve overpaid in taxes by claiming too few exemptions on their federal withholdings. Yet another reason why I begrudgingly write a check that states “Pay to the Order of United States Treasury” most years.

    2. I completely fucked up my withholding last year and got $10k back from the feds. (Wife’s salary changed a lot.) But this year it’ll be much more reasonable.

  15. A SHINING BEACON OF FREEDOM LIGHTS THE WORLD

  16. The other involves the Social Security Administration insisting that if tiny tots indirectly benefited from public assistance collected by adults decades ago those now-grown ex-tots are responsible for any overpayments the feds may claim.

    Why stop there? The community in general indirectly benefited from the ill gotten gains so why not garnish everyone until the debt is paid? If only I could remember the the legislation authorizing such collective punishment.

  17. Jesus H Fucking Christ

    Guess I should have expected this. Maybe my CPA won’t be flabbergasted when I suggest to him that the government will seize 401ks and IRAs in the future.

  18. We need a whistleblower to explain how this got into the bill.

  19. Wring that turnip! There’s bound to be some juice left!

    So, this is what the early stages of the collapse of a republic looks like.

    1. I think we’ve started into the middle stage.

  20. I think i may have found the source: FY 2008 Treasury budget request.

    http://www.treasury.gov/about/…..08_bib.pdf

    see page 48 (not the pdf page)

    “Eliminate the Ten-Year Limitations Period on Offset ?
    Ths proposal would elmnate the ten-year lmtaton
    on the collecton of delnquent non-tax federal debts
    by admnstratve offset. Delnquent debts could be
    collected by offset wthout regard to any statutory,
    regulatory or admnstratve lmtaton on the perod
    wthn whch debts may be collected. The proposed
    change would allow for the collecton by offset of
    other federal debts consstent wth the current law
    for student loans.”

  21. I think i may have found the source: FY 2008 Treasury budget request.

    http://www.treasury.gov/about/…..08_bib.pdf

    see page 48 (not the pdf page)

    “Eliminate the Ten-Year Limitations Period on Offset ?
    Ths proposal would elmnate the ten-year lmtaton
    on the collecton of delnquent non-tax federal debts
    by admnstratve offset. Delnquent debts could be
    collected by offset wthout regard to any statutory,
    regulatory or admnstratve lmtaton on the perod
    wthn whch debts may be collected. The proposed
    change would allow for the collecton by offset of
    other federal debts consstent wth the current law
    for student loans.”

    1. actually, looks like it first appeared in FY 2005
      http://www.treasury.gov/about/…..ts/bib.pdf

    2. So only non-tax debts?
      That’s an improvement.

      But it sounds like it won’t be long before it includes income tax. Don’t pay your taxes and you children and grand-children will basically just be slave to the government for the rest of their lives. I’m sure they’ll apply interest and penalties.

  22. They won’t seize 401Ks. They will just mandate ‘safe’ investments, to protect you. For your own good. What’s safer than TBills?

  23. I’ve seen a number of stories recently on how third party debt collectors are increasingly resorting to harrasing the relatives of people who defaulted on debt to try and get them to pay back the debts.

    They can’t really force you to do so, of course, but they can try making your life hell unless you volunteer.

    1. I have been reading that too. The other scam is for con artists to just call people up claiming to be the IRS and demanding money. Since the IRS often does exactly that, many people send the money.

      The IRS has become such gangsters that the gangsters can just call up and demand money in the name of the IRS and no one can tell the difference.

      I actually had a debt collector pull what you were talking about on me regarding a sibling’s debt. If it ever happens to you, just start talking about the Fair Debt Collection Practices Act and statutory damages and attorney’s fees. It is like pulling a cross out in front of a vampire.

  24. So now I have to store into perpetuity every ancestor’s tax return on the chance I may have to prove their mistake 106 years later?

  25. This really sucks. I know people who have old debts to the IRS from 10 years ago that they have never been able to repay.

    I mean, this guy would basically have to be a slave for 10 years to pay it off. He has no meaningful assets worth speaking of, and is not exactly regularly employed.

  26. “Going after the next generation?which never made the decision to incur a debt to begin with?really is a massive break from previous policy.”

    The author must be joking. What does he think the national debt is?

  27. The Founding Fathers overthrew the government for less than this.

  28. Slowly,little by little, the bastards in both parties will eliminate our private property by confiscation or putting us so deeply in debt we need to sell everything so we own nothing. This, an abiding principle of Marx and Engels. I am disgusted with progressive imbeciles who ” feel” rather than reason. Enumerated powers means nothing to Obama et al.

  29. Maybe the rest of us should revive a few medieval practices, too. Rising up against a king who makes a laughingstock of the country is one.

  30. The exact same thing, same circumstances, has been happening to my son-in-law and at least some of his siblings for several years now.

  31. I know a young lady this happened to some 4 or 5 years ago. Her mother collected survivor benefits for her two children, they were apparently overpaid and when the young lady turned 18, got a job and filed for a refund the next year, they offset it to the SSA debt of her mother. In her case, her mother is a derelict on welfare and has no taxable income. So, they took the daughters. Thus, this action by the IRS is not unheard of, tho the elimination of the statute of limitations is surely open to abuse, especially since the government seems not to have to prove the debt. How’s that “hope and change” working out for you now?

  32. Orwell’s idea of a jackboot stomping on a face for eternity is outdated – it will instead by a bureaucrat slowing killing you with regulations.

  33. Until today, I only heard that some kinds of private student loans are not forgiven in case of the borrower’s death, but to read the story above is some kind of nonsense for me, to pay for the debt, which occurred due to the overpayment to not-know-who 40 years ago! Looks like loans for people with poor creditscore are the safest as do not require much info about your relatives to cover your debt in the worst case.

Please to post comments

Comments are closed.