Can the government seize your tax refund to pay a relative's debt?

Two months ago, Mary Grice, a career employee at the Food and Drug Administration, was notified the U.S. Treasury had confiscated her state and federal tax refunds totaling $4,500.

The government had taken the money before she knew there was a problem.

"To be honest, I was ticked off," Grice said. "I'm like 'how can they intercept or take my funds without my first being notified about it?'"

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Mary Grice
CBS News
The claim against her came from the Social Security Administration which said it overpaid death benefits to Mary's family after her father Scott Grice died in 1960. Mary was five years old. In other words, without notice and for a debt that was not hers, the government had her refund seized anyway.

Her attorney Robert Vogel has sued, demanding the government stop these collections.

"The government should not be in the business of trying to collect 30-year-old debts from people," Vogel said. "There is no way that people have any reason to keep their records for that long."

This tracking of old debt stems from an obscure change in the 2008 farm bill that allows the government for the first time to seize debt more than 10 years old.

Social Security released a statement saying it found 400,000 taxpayers with long-term debt that could total $714 million, claiming that "Social Security attempts multiple times to notify debtors" before collection. But Mary Grice, as a government employee, should have been easy to find.

What does Grice think about the fact the government never notified her?

"To be honest I think it's a ploy," she said. "We'll get your money first."

Mary Grice's story, which was first reported in the Washington Post, led to a very quick reaction from Congress. Two senators -- Barbara Boxer and Barbara Mikulski -- have asked that Social Security stop going after decades-old debt when the taxpayer involved was a child.

  • Wyatt Andrews

    Wyatt Andrews is a CBS News National Correspondent based in Washington D.C. He is responsible for tracking trends in politics, health care, energy, the environment and foreign affairs.

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