Albeit the example below is a US issue, irrational actions will oft times precede insolvency irrespective of whether the potentially insolvent party is an individual consumer, corporate customer or, in the example cited below, a sovereign government. The key takeaway here for our clients is to be wary when customer behavior makes sudden change from their ordinary including; days to pay, unreturned messages, suddenly spotty communication or frivolous disputes and service complaints.
The US government is now going through old records to see if it overpaid people on Social Security. If it thinks it did, it can now seize the IRS tax refund checks of the CHILDREN of those people it thinks it overpaid.
it’s already happening. For the past three years, the US government has been confiscation hundreds of thousands of Americans’ tax refunds, according to the Washington Post. It has already confiscated $1.9 billion in tax refunds this year alone.
The amazingly irrational thing is that the US government is doing this even if it has little or no proof and no exact details. And the letters the government sends to unsuspecting taxpayers are frightening, use accusatory language, and include other financial threats.
To make matters even more irrational is that no one in the US government is willing to take the responsibility for this new policy—Social Security said it didn’t do it, ask the Treasury Department. Treasury said—ask Congress.
Tax refunds are clearly becoming the new promised land for US government regulators and bureaucrats desperate for more revenues. We already know that confiscating tax refunds are the only real way the IRS will be able to impose Obamacare non-compliance penalties, and now it seems like the Social Security Administration is jumping on that same bandwagon.