Last week, the Washington Post publicized a disturbing new practice of the Social Security Administration and Department of the Treasury: holding on to taxpayers’ refunds in order to cover old debts. These were decades-old debts, usually Social Security overpayments made to the taxpayer’s late parents. There was an overwhelming negative reaction to the Post story, and people affected contacted their representatives in Congress. Now the Social Security Administration says that they’re ending the practice.

It must have seemed like a good idea at the time–a little-noticed section of the 2008 federal farm bill did away with the 10-year statute of limitations on debts to the government, and the feds set up an infrastructure to take these debts out of individual taxpayers’ refunds. Sounds reasonable enough if the debts were incurred by the taxpayer during their adult life, but that isn’t always what happened.

The Social Security Administration sought overpayments from the ’50s and ’60s, made to people who are now deceased. Dead recipient? No problem: the Social Security Administration would simply start with the recipient’s oldest child, find any siblings with income who were owed tax refunds, and go down the line, taking their tax refunds until the debt was satisfied.

In some cases, the government couldn’t even prove to the ostensible debtors who had received an overpayment in the first place. They also didn’t do anything sensible like send letters to living relatives of the person who received an overpayment so they could straighten out the issue before having their tax refunds taken away.

Good news: the Washington Post reports that the government has responded to taxpayers’ reasonable outrage at this program. Acting Social Security Commissioner Carolyn Colvin released a statement yesterday explaining that they’ll stop sending the names of intergenerational deadbeats over to the Treasury Department:

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.

Well, that’s good. Maybe they should have looked into that whole “responsibility and discretion” thing before using this program to retrieve overpayments from the ’60s.

Social Security stops trying to collect on old debts by seizing tax refunds [Washington Post]

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