A Michigan client recently received a disturbing demand letter about her father’s federal pension benefits received between 1977 and his death in 2012. The federal personnel agency, Office of Personnel Management (OPM) claimed her father had been overpaid by more than $20,000. There was no explanation of how the alleged overpayment occurred or when.
The father’s estate had been probated and closed. I wrote a letter for my client telling OPM that the estate is closed and they are out of luck. According to an April 10, 2014 article in the Washington Post, my client has a much bigger problem than I thought.
The government is going after taxpayers, pensioners and Social Security beneficiaries for decades-old overpayments. The tax refunds of alleged debtors and family members of deceased alleged debtors are being arbitrarily withheld to pay back the treasury. In many cases, there is no explanation of when the overpayment occurred, or even who in the taxpayer’s family received the overpayment. Department of Treasury claims that it sends notices, but it often turns out that they were sent to decades-out-of-date addresses. My client was lucky enough to receive the demand letter, but except for an amount and the statement that the overpayment occurred between 1977 and 2012, there was no explanation of how the claim was calculated.
Until a few years ago, the federal government was limited in its authority to collect most types of debts by a 10-year statute of limitations. The Washington Post article reports that the statute of limitations on debts to the federal treasury was eliminated by Congress in the Food, Conservation, and Energy Act of 2008. This means that the government now has the power to pursue recovery of unfairly received benefits, no matter how long ago. For example, there is now no time limit on claims by the Office of Personnel Management for pension overpayments. If OPM decided that William Henry Seward, Secretary of State in the Lincoln Administration, received an overpayment on his pension, OPM could pursue his heirs for reimbursement.
Once more, Mark Twain’s observation, “No man’s life, liberty or property is safe while the legislature is in session,” is proven right. If Congress has the power — not the right, just the power — to retroactively wipe out the statute of limitations on U.S. government claims, would the British Parliament have the power to do the same? The Brits could pursue collection of pre-American Revolution taxes owed under the Stamp Act from the descendants of colonists. Would that be any more ridiculous?
John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com ©2014 John B. Payne, Attorney