A strange story of bureaucratic overzealousness emerged in Florida last week when a local media outlet reported that a Jacksonville man had his tax refund cut by $895 because the Social Security Administration found it had overpaid his now-deceased mother by that amount 42 years ago.
According to First Coast News, by way of the TaxProf blog, Gilbert Stokes, a 60-year-old taxpayer, had been counting on a large tax refund from the IRS this year. However, he received a letter from the Social Security Administration in January informing him that it had overpaid his mother over four decades ago, and that it would withhold the $895 from his tax refund unless he contacted them.
The SSA went ahead and took the money out of his tax refund this season, even though it turned out that they had confused him with his father, who had the same name as Mr. Stokes, and they had traced the overpayment to his father’s Social Security number, not his. Stokes now has to fill out a request for a waiver of the over-payment recovery in order to reclaim his full tax refund.
So much for the IRS’s dream of a Real-Time Tax System which still manages to get things wrong 42 years later.