Social Security error costs man $10,000 after 30 years
An Iowa man lost his tax refund after a claim for an alleged Social Security overpayment that occurred 30 years ago
What seemed to be a routine tax season procedure ended up turning into an unexpected financial nightmare for an Iowa resident. 30 years after receiving benefits for the death of his father, a man discovered that an alleged administrative mistake by the federal government would cost him thousands of dollars, a situation that today keeps his family searching for answers.
Local media KMTV 3 News Now Omaha announced that Christopher Storm, a man from a small town in Iowa, never imagined that financial support received during his adolescence would come back to haunt him 30 years later. This is another one of those horror stories in which a person has to pay thousands of dollars for an error made by the Social Security Administration (SSA) itself. This time, not only that: The Internal Revenue Service (IRS) withheld the tax refund to cover debt and interest on a Social Security survivor benefit that authorities say were overpaid in the 1990s.
The event dates back to 1996. Storm was then 17 years old and had just faced one of the most difficult moments of her life: the death of her father. As a recipient of survivor benefits administered by the SSA, he began receiving monthly payments of $500.
That financial support continued until he reached the age of majority. He then received a final lump sum payment of $3,000. For years, the matter seemed completely closed.
However, decades later, the IRS notified that Storm had received extra money and must pay it back. According to the claim, the alleged overpayment amounts to $8,000. Approximately $2,000 in accrued interest is added to that amount, bringing the total debt to $10,000.
Like any taxpayer who expects to receive a tax refund, especially since current tax laws increased the amount of refunds, the news of the seizure of that money took the family by surprise.
“It was a big help to receive the money, the funds, and to be able to try to get ahead on my own,” Storm told KMTV. “We are desperately trying to figure out what is going on.”
Uncertainty has become an additional burden on the marriage. As Storm explained, the tax refund withheld would have been used to make necessary repairs to his home, an expense that will now have to wait.
"To some people it may not seem like a big deal. To us it is," Storm said. “For them to say, thirty years later, ‘Hey, that was an overpayment,’ is certainly very unfair.”
As the family tries to understand the origin of the claim, their legal representative has offered a possible explanation. Keith Buzzard, an attorney at McGinn Law, suggested authorities could consider that Storm received more money than allowed when she was 17, which would have led to the alleged overpayment.
“It is quite common,” said the lawyer. "I think in any given year about a million of these letters are sent. They get a letter telling them they owe $40,000 or $50,000."
According to the news site, the SSA did not issue public comments on the case nor did it respond to requests for information.