Death and Taxes

Nothing is more certain, according to Ben Franklin, as we recall.  But even Ben would probably twirl in his grave if he read Senator Tom Coburn’s (R-OK) latest study regarding the twisted interaction of these two concepts, indicating that in the last ten years, Washington has sent over $1 billion (that would be with a capital “B”) of your tax dollars to dead people – about a quarter of a million decedents, to be exact.  And take little comfort in the June revelation by Obama’s minions that they are taking “new steps” to call a halt to this nonsense.  We’ll believe it when we see it.

            So, consider these seven deadly sins of your government and ours:

  1. Social Security stimulus bucks sent to the deceased – That would be only about $18 million in the form of those $250 per person stimulus checks which were sent to 71,668 deceased inviduals, thank you very much.  And in the understatement of the year, Coburn notes that “Maintaining accurate death information for its beneficiaries has been a problem in the past for SSA (Social Security Administration).”  Really.
  2. Heating and air conditioning for the departed – There went another $3.9 million in Federal payments, to more than 11,000 dead people, to help provide air conditioning and heat for their homes.
  3. The Department of Agriculture sends $1.1 billion to dead farmers – about 173,000 dead farmers, in particular.  Blame the USDA – the rules do allow a farm to continue to receive subsidy payments for two years after a recipient’s death in certain circumstances, but investigators found that 40 percent of the $1.1 billion went to folks who had died three or more years ago!  And 19 percent was paid to individuals who had passed away seven or more years ago!
  4. Housing subsidies for the dead – Seems the Department of Housing and Urban Development (HUD) managed to dole out more than $15.2 million for 3,995 households containing at least one deceased tenant in 2008 alone!  And about half of this sum (some $7 million) went to single member households comprised solely of one deceased individual.  And in one of the more masterful understatements we’ve heard in a long while, HUD described the $7 million in payments sent to single member homes as “clearly questionable,” since it was unclear who was living in the house if the only household member had passed away.  Right.
  5. Posthumous prescriptions for pain – Seems Medicaid paid claims for prescriptions written for over 1,800 deceased individuals (about $200,000 worth) and prescriptions written by 1,200 docs post-death (about $500,000 worth) in 2006 and 2007. 
  6. Dead men walking – canes and walkers for the deceased – Investigators from the U.S. Senate Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs (Whew!  The PSI for short.) couldn’t even quantify this one, but estimated that losses to taxpayers may have been as high as $92 million  PSI found that from 2000 to 2007, Medicare paid between $60 million and $92 million for hundreds of thousands of claims for medical equipment prescribed by deceased physicians.  Nice.
  7. Federal grants for medical care for individuals with HIV/AIDS who died years ago – Who knows how much has been wasted on these various vegetable soup programs – CARE Act, Comprehensive AIDS Resource Emergency Act, and HOPWA Program, the Housing Opportunities for Persons With AIDS Program.

The report’s conclusion?  “Any money wasted hurts program beneficiaries,

as well as taxpayers.”

            How profound.

CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation.

            Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd. with offices in Incline Village and Reno.  He is also a contributor to the 13th edition of Tax Savvy for Small Business, published by Nolo.  He can be reached at 831-7288, and welcomes comments below.

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