A.L.E.R.T.
(America Law Education Rights & Taxation)
10-20-2001
IRS To Nab Social
Security Payments
Foreword from Gordon Phillips --
The author of today's article warns: 'The federal government has launched an aggressive debt-collection program, which is ramping up this fall to nab some 232,000 Social Security recipients who owe taxes.'
What a surprise. Government tax receipts are down with millions no longer filing returns. Meanwhile, educated business owners by the thousands no longer withhold payroll taxes for free as uncompensated bookkeepers for government.
So the tax machine is hungry. Like all organisms, it must eat to survive. What to do? Tax the elderly. They're exposed and dependent.
Remember, all federal welfare 'benefits' are doled out at the largesse of a grateful Congress focused on perpetual re-election. No citizen has a claim on a single dime -- lawfully speaking.
The vast majority of the elderly are 'on the dole', as my grandfather used to say, and easy targets.
Naturally this was to be expected. Central Planners looked to the future and saw the well running dry. Every Ponzi scheme dries up eventually. Soon there would be no more free cheese. So Congress first began tinkering with Social Security 'benefits' in 1983. Expect 'means testing' and other severe tinkering down the road.
I would warn struggling seniors to stock up on pet food before food stamps are taxed as well. Perhaps A.A.R.P.'s monthly magazine, 'Modern Maturity', should start including discount coupons.
Young people contemplating a lifetime of generous donations to federal wealth redistribution programs would do well to heed the following quotes, as presented among numerous others in my book, 'Losing Your Illusions'.
'There is no prospect that today's younger workers will receive all the Social Security and Medicare benefits currently promised them'. -- Dorcas Hardy, former Social Security Commissioner and author of 'Social Insecurity', quoted in the December 1995 Reader's Digest
'When you pay social security taxes, you are in no way making provision for your own retirement. You are paying the pensions of those who are already retired. Once you understand this, you see that whether you will get the benefits you are counting on when you retire depends on whether Congress will levy enough taxes, borrow enough, or print enough money ...'. -- W. Allen Wallis, former Chairman of the 1975 Advisory Council on Social Security, May 27, 1976
'All we have to do now is to inform the public that the payment of social security taxes is voluntary and watch the mass exodus'. -- Walter E. Williams, John M. Olin Distinguished Professor of Economics at George Mason University in Fairfax, VA, January 24, 1996
Past articles by INFORM AMERICA! on the lawful application of Social Security statutes can be read at http://www.informamerica.com/news/archives.htm under the following headings.
THE INFORMED AMERICAN
07-24-2001 You Can Still Be Free...IF...You Want To Be!
07-27-2001 Social Security Is Voluntary Within The 50 States
07-30-2001 Can I Quit Social Security and Get My Money Back?
08-11-2001 The Truth Behind Payroll Tax Withholding
A.L.E.R.T.'s
09-27-2001 Raiding The Social Security 'Lock Box'
And now, today's article.
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IRS PLAN HITS SOME ON SOCIAL SECURITY -- by Kathy M. Kristof, staff writer
for the Los Angeles Times
October 16, 2001
Retirees be warned. The federal government has launched an aggressive debt-collection program, which is ramping up this fall to nab some 232,000 Social Security recipients who owe taxes.
Unless they respond quickly, these Social Security beneficiaries could lose as much as 15 percent of their retirement or disability income.
The program is part of an effort to collect all delinquent government debts, ranging from student loans to back taxes, from people who get government payments from contracts, wages or social programs. The goal: Collect an estimated $1 billion annually in government debts owed by individuals and companies that receive government payments.
Although the collection effort started last summer, until now it has focused on relatively small groups: a few thousand federal government workers and retirees and some child support scofflaws, for instance.
Now the government is targeting Social Security recipients who owe taxes. The stepped-up collection effort is expected to bring in $311.8 million a year in delinquent income taxes.
In general, the government will withhold as much as 15 percent of benefit payments unless the recipient responds to or corrects his or her delinquency within 30 days of receiving a notice. That could reduce a retiree's $1,000 monthly Social Security benefit to $850 until the debt is paid.
This collection program was authorized by two laws passed in the late 1990s that gave the U.S. Treasury far-reaching authority to go after people who owe the government money because of defaulted student loans, back child support, tax delinquencies or other debts.
'The IRS has always had the authority to do levies, but they had to do it on a payment-by-payment basis in the past,' said Mike Brostek, director of tax issues at the General Accounting Office in Washington. 'This program allows them to keep the levy going.'
Until recently, the government's internal tracking procedures weren't
sophisticated enough to recognize when one government agency was sending a check to someone while another agency was trying to collect delinquent payments from the same person.
Since these laws were passed, government agencies have been attempting to crosscheck lists of contractors, employees and benefit recipients with lists of persons and companies whose government debts are at least six months in arrears.
Some government employees and government retirees already have been affected. The Social Security Administration also started dinging about 50,000 recipients for back child support and delinquent student loan payments this year.
Social Security recipients with tax delinquencies will get two warnings that they must resolve their tax debt or face reduced retirement or disability benefit payments, said Leslie Walker, a Social Security spokeswoman in San Francisco.
The first wave of warnings is expected to go out next month, with a second wave in December.
If Social Security recipients don't contact the IRS to either make arrangements for payment, correct an erroneous bill or request a hardship exemption, their benefit payments will be cut as much as 15 percent a month beginning in February, Walker said.
Previously, the Social Security Administration wouldn't reduce benefit checks that were for less than $750 a month. The current tax-collection program has no such minimum-benefit threshold, Walker said.
However, certain types of benefits will be exempt from collection. Payments to children, lump-sum death payments, so-called Prouty benefits -- a minimum Social Security payment to some people who didn't qualify for regular retirement benefits -- and Supplemental Security Income benefits will not be affected.
The agency also won't reduce payments to those in bankruptcy or who have applied for tax relief because of a hardship or because they claim their tax debt was the result of improper conduct by a former spouse -- an 'innocent spouse' claim.
'The IRS is not going to tax your grandmother to death,' said Richard Quarterman, a San Diego tax expert who specializes in tax collections. 'A great deal of these [Social Security recipients] are going to qualify for hardship exemptions.'
However, what Social Security recipients should not do is ignore the tax notices, Quarterman said.
Unless taxpayers ask for relief before the collection process starts, their payments will be reduced. It's far more difficult to stop garnishments once they've begun than it is to head them off in the first place.
Those who think they may qualify for a hardship exemption should contact the nearest Taxpayer Advocate's office, Quarterman said. That office will need information about your income and expenses, as well as how much you owe in back taxes.
If the exemption is approved, the collection process can be put on hold almost indefinitely, or at least until or unless your monthly income rises past set 'hardship' thresholds. (The thresholds vary by both state and county, based on standard costs of food, clothing, housing, utilities and transportation.)
'Most seniors and Social Security recipients will not be affected,' IRS Commissioner Charles Rossotti said. 'But we want those who are to contact the IRS now so they can resolve their tax obligations before it affects their Social Security payments.'
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