Tax Help Blog

The Case of the Widower & His Missing Social Security Benefits

Posted by HB Duran, EA on September 17, 2010 at 1:37 PM

This morning as I sipped my coffee and read my emails for the day, I was reminded of one of my favorite tax resolution cases and thought I'd share.

There was once an elderly man who frequented a mom 'n pop cafe in New York  - the kind where the waitresses all know your name and remember your order from last time. (I love those places) One day this widower, normally cheerful, was visibly depressed. When the staff and other regular patrons asked what happened, he stated that the State of Florida took ALL his Social Security benefits out of his bank account. He couldn't pay his bills and he didn't know what to do. Social Security was his only source of income and he didn't have any family to turn to.

Well wouldn't you know it, this angelic group of people pooled their own money together and researched tax resolution firms -  I was lucky enough to be the one they chose. I was so touched by his story and the good Samaritans who helped him. They even lent him money to pay his bills!

Through my research, I found that this sweet old man used to live in Florida with his late wife. He worked all his life and retired from a Campbell's Soup factory there. His wife usually handled the bills and when she passed away, he was devastated. He had no idea that he owed any state taxes. Fast forward about ten years - he's living in New York by himself, and found solace in this friendly cafe, which he frequented. Just like that, his money was gone.

How could this happen? 

Unlike the IRS, who has a Collection Statute of ten years, many State Departments of Revenue can collect forever. This was the case with Florida - it just took them a while to find him. Like any bureaucracy, the State had no idea of this man's situation, they just knew there was a balance due and took action. Worse yet, his bank account was frozen so he couldn't use it at all.

I knew through experience that there are certain rules that prevent the levy of Social Security benefits, so I got on the phone with the State and his bank right away. I was able to disqualify the levy action and have it thrown out.

I successfully had the levy reversed, all his money put back and had his account placed into a non-collectible status so he would never be bothered again. Thanks to those good Samaritans at the cafe and some good-old-fashioned standing up to "The Man," this gentleman could once again just relax with a cup of coffee. I love a happy ending. :)

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