Tens of thousands of Americans have been bushwhacked by a single arcane sentence in a 673-page law Congress enacted six years ago.
The Internal Revenue Service is seizing both federal and state tax refunds for individuals whom the Social Security Administration accuses of having received excessive benefits years ago. Except that the government often has zero evidence of the overpayments, and the feds have held children liable for the alleged debts of their long-dead parents.
The Food, Conservation and Energy Act of 2008 contained more than 275,000 words shoveling out benefits far and wide. The latest hubbub arises from a single sentence in Section 14219: “Notwithstanding any other provision of law, regulation, or administrative limitation, no limitation on the period within which an offset may be initiated or taken pursuant to this section shall be effective.” Prior to that law, federal agencies had a 10-year statute of limitation for collecting debts allegedly due to them.
Thanks to that 2008 farm bill, the IRS is hammering taxpayers for the Social Security benefits their deceased parents received in the 1970s or earlier. The Washington Post noted last week, “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.”
This scandal has been brewing, but only recently showed up on the Beltway radar. Last year, a report by an NBC affiliate in Chicago noted that, thanks to that 2008 provision, “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.”
No one in Congress would take credit or blame for crafting that sentence in the 2008 farm bill. It is still unclear who authored that provision (which may have been inserted into the bill at the behest of some federal agency).
In many cases, agencies have zero evidence that people were actually overpaid. All they need do is make the assertion, and the IRS will redirect people’s tax refunds into the Treasury’s coffers. CNBC noted that the seizure notification letters “the government sends to unsuspecting taxpayers are frightening, use accusatory language, and include other financial threats.”
The Social Security Administration was exploiting that 2008 provision to target 400,000 taxpayers who it claimed “collectively owe $714 million on debts more than 10 years old.” In many cases, the Social Security Administration was having the IRS seize tax refunds for children whose parents had died decades ago. After The Washington Post splayed that story on its front page last Friday, acting Social Security Commissioner Carolyn Colvin announced Monday that the agency would desist from having the IRS confiscate tax refunds for alleged overpayments more than 10 years old “pending a thorough review of our responsibility and discretion under the current law.”
It was predictable that nullifying the statute of limitation on government debt collection would lead to gross abuses of American citizens. Similar type of outrages have occurred with federal environmental enforcement against wetland owners and asset-forfeiture proceedings against innocent property owners.
Unfortunately, most congressmen don’t give a darn about any injustice that profits the federal government. Several senators condemned the Social Security Administration for snatching tax refunds to settle ancient alleged debts of deceased parents. Once the media spotlight shifts, though, it is unlikely that Congress will repeal that 2008 sentence that granted federal agencies vast power over Americans.
The latest controversy is another example of our dysfunctional “attention-deficit democracy.” Congress routinely enacts massive laws that are neither read nor understood by the vast majority of House and Senate members. This past January, Rep. Earl Blumenauer, Oregon Democrat, declared that “nobody” read the 1,528-page, trillion-dollar spending bill that Congress enacted. How long will it take for Americans to learn of all the surprises included in the 959-page farm bill Congress enacted in February?
Such laws often resemble legislative cluster bombs. A cluster bomb scatters hundreds of small bomblets across a wide landscape. The bomblets can lie dormant in the landscape for years waiting to kill or maim children or anyone else who takes an unlucky step nearby.
Similarly, arcane provisions in legislation can suddenly explode under people peacefully going about their daily routine. The victims are shocked to see their lives disrupted by senseless decrees that no one seemed to notice when a law was enacted. The worst cases will spawn a brief flurry of news coverage, after which the media and Congress will return to championing new laws to protect people against themselves.
The reckless seizure of tax refunds based on the puniest pretexts is a harbinger of how the feds will enforce Obamacare penalties for individuals without federally approved health insurance policies. There will be no need to prosecute alleged offenders; instead, their tax refunds will be pre-emptively commandeered.
The burden will be on the citizen to hire a lawyer and fight the feds in their own courts to get due process. Good luck, chumps.
“Freedom under the law” increasingly means freedom to be fleeced by federal agencies. The nullification of the statute of limitations on federal debt collection is a step toward turning the nation into a giant debtors prison to serve politicians and bureaucrats. There is seemingly no way to exact retribution on the legislators whose negligence spawns injustices far and wide.
James Bovard is the author of “Attention Deficit Democracy” (Palgrave, 2006) and “Lost Rights” (St. Martin’s, 1994).