Finding Real Life Solutions To Your Tax Problem

Federal government to return seized tax refunds

On Behalf of | Jun 9, 2017 | IRS |

The long rumored tax reform is still months away from serious discussion in Congress, but one practice bemoaned by Republicans and Democrats alike is already being repealed that will satisfy their constituencies. For years the federal government would seize the tax refunds of Americans whose dead parents improperly received Social Security benefits when they were still alive.

Basically, the government relied upon a line item change in the 2008 farm bill that allowed it to recoup money improperly paid to Social Security recipients even after they passed away.  The reasoning was to stay true to current and future claimants. Tragically, many taxpayers who had their tax refunds seized never even knew that their parents incurred debt to the government. Also, a number of collection notices were sent to outdated addresses where taxpayers had not lived in years.

For the first three years of the collection program, the government recouped more than $400 million.

Fortunately, a lawyer who represented six affected taxpayers in a lawsuit that spanned several years finally was able to convince lawmakers to make the necessary changes to stop seizures and return money that was held. All told, about 65,000 taxpayers will be eligible to have about $56 million in recouped tax refunds returned to them.

The story exemplifies the need for an experienced tax attorney to stand up against the government (whether state or federal) when it comes to overreaches to collect taxes. If you have questions about your rights and options in a tax dispute, an experienced lawyer can advise you.

The preceding is not legal advice.

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