Social Security halts program to collect old debts by seizing tax refunds

Tampa Frontage Road Social Security OfficeThe Social Security Administration will no longer attempt to collect debts more than 10 years old, after public outcry over the agency’s interception of some taxpayers’ income tax refunds. The agency was taking income tax refunds to settle debts that resulted from Social Security or Supplemental Security Income payments. Some of the overpayments were to relatives of the taxpayers and occurred decades ago.

In 2008, the statute of limitations on debts to the government more than ten years old was lifted. This year, the Treasury Department has intercepted approximately $2 billion worth of income tax refunds, and about $75 million of that was for debts more than 10 years old.

Social Security announced a halt to the collection of debts older than 10 years after news reports on the case of Mary Grice, a federal employee in Maryland. Grice’s income tax refund was intercepted because Social Security said that someone in her family was overpaid benefits after her father’s death in 1960, when she was four years old. Grice filed suit against the government, saying that her due process rights were violated, because she did not incur the debt and she received no notice of it.