If the Social Security Administration decides it payed out too much to you after the death of a spouse, you can say goodbye to your tax refunds, with no prior notice. Benefits Pro has recently reported that three people are suing both the IRS and the Social Security Administration, saying not only were they not notified that their refunds would be taken, but also that they were never even told that the decades-old survivor benefits they were paid were too high.
The claimants are pointing out that suddenly losing $2,000-$5,000 they were counting on to pay rent and college tuition is causing them significant problems that they had no way of anticipating or planning for.
In 2014, the IRS confiscated about $75 million in refunds to cover overpayments to 400,000 taxpayers or members of their families. But in fact, due process principles and the Social Security Administration’s own regulations prevent taking taxpayer refunds without notification until after the fact.