Grassley Seeks Answers: Why Pursue Children for Deceased Parents’ Debts?

Published April 17, 2014

The Washington Post declared victory this week for exposing the seizure of income-tax refunds to claw back alleged Social Security overpayments.

But the legal issue of garnishing money from the children of deceased parents remains contentious, and a senior senator is demanding answers from the agencies involved.

As reported by and the Post, backtracking Social Security officials announced they will now only pursue overpayment cases less than 10 years old. That timeframe was already set in Internal Revenue Service statutes, so the administration merely acknowledged the law.

Sen. Charles Grassley said the affair is far from over.

“Is it fair and reasonable to pursue debts from the surviving children for payments to the parents?” the Iowa Republican asked. “The statute of limitations language didn’t give permission to collect debts where the debtor is deceased.”

More Than 30 Questions

Grassley, the top Republican on the Senate Judiciary Committee, sent letters to Acting Social Security Commissioner Carolyn Colvin and Treasury Secretary Jacob Lew requesting answers to more than 30 questions.

Grassley said the Social Security Administration and the IRS, in their zeal to collect cash, acted in ways “possibly beyond what Congress intended.”

“It appears that SSA is not performing due diligence in notifying individuals or allowing them to inspect records of the debt they supposedly owe, which are violations of the law,” Grassley told Colvin.

Other critics of the heavy-handed tax collectors say Social Security benefits could be the first fruits of an inter-generational money grab.

“This opens the possibility for the federal government to attempt to collect federal student loan debts from the children of deceased parents,” said Pamela Mullin, an activist with Student Loan Justice.

Watchdog reported in February that more than $1 trillion in federally backed student loans are outstanding. With compounding interest, there is little to no likelihood of repayment in the recipients’ lifetimes.

‘No Precedent for Inheriting Debts’

“There’s no legal precedent for minor children inheriting the debts of their parents,” Mullin said.

Upholding the IRS-Social Security garnishments program could set a costly new precedent.

Grassley gave Colvin and Lew until April 29 to respond to his legal and procedural questions.

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