Social security and tax fraud?

[cptacek]

What would you do if you knew somone who was legitimately disabled, and his mother, who took care of him for ~50 years, pawned off that responsiblity to his brother, but kept receiving the social security benefits, and his dependent status on her taxes, for herself, for about 10 years now?

She still pays for health insurance, LIFE insurance (but no one is dependent on him, and the money goes to her if he dies) and some clothes, a bit of spending money for entertainment and satelite. He lives with the brother, and his brother pays for everything else.

It is my understanding that she gets about $900 a month and gives the brother about $300 every 6 weeks.

Ok, so now what if all these people are related to you?

[moneybags]

Isn't there a finder's fee for reporting tax fraud?

[cptacek]

Would you report a relative? That is what is getting me. If it was someone else I was not related to and I knew they were breaking the law, I would report it, no problem.

[tinapbeana]

Give them an out. Say "What you're doing is illegal, and if you don't stop I'm going to have no choice but to report you...".

Either she stops, or she doesn't. At that point she's choosing for you.

[cptacek]

Earlier this year, sometime in March or early April, I think, I did tell her that the rules had changed and that for mentally disabled children, they had to live with you in order for you to use them as dependents (that was a recent tax law change, as far as I know). She looked like a deer in the headlights, and said, "Well, for tax purposes, he still lives with me." Yeah, like MAYBE 2 weeks out of the year, and that is a big maybe.

So, part of my hesitation is that I've made noise before in the past, and a lot of the rest of the family knows my stance, so if out of the blue she gets in trouble for it, I would get the finger pointed at me.

But you are right Tina, the best way probably would be to be open and honest about it.

[Beccagold]

I would discuss the situation with the brother. He should be aware that he's being taken advantage of. If he doesn't have a problem with it, then I'd say stay out of it. If it does bother him, he should speak w/ the mother about it.

[Daylily]

I agree that it is an issue for the brother.

[disneysteve]

I'm curious if the brother has also been claiming the person on his taxes. If not, why? If I was providing care for someone, I would claim them as a dependent.

[lieweheksie]

In this story the most NB person is the disabled brother- I would just ask myself what the impact on him would be of any decison that I made

[cptacek]

No he doesn't claim him. He couldn't before this year (I think) and I didn't tell the brother about the tax law change until after April 17, so I don't think that he knew about it.

I think the underlying problem here is that the brother takes family obligations very seriously, and knows the disabled person should not live with the mother. Also, the brother knows that his mother is a manipulative, money-grubbing, selfish person and has been that way for over 70 years, so nothing is going to change her. So to keep peace in the family, and to prevent her from taking the disabled person back to a bad situation, he hasn't said anything.

[scfr]

This one hit a nerve with me, so I've been mulling it over for awhile.

I have a suggestion, and just so you know how I came up with it, this is where I'm coming from:

1. The needs of the disabled man is the primary concern, no matter what other family garbage may be going on. The very worst thing that could happen to him would be if the government found out what was going on and made him a ward of the state, forcing him in to some undesirable institution or group home.

2. Benefits that truly help out people in need, such as social security disability, are good things.

3. People who try to milk the system and take advantage of above-mentioned benefits are pond scum.

4. Without knowing 100% of the facts, while it does sound like while the mother is defrauding the system, overall the taxpayers are not being defrauded because the total amount of benefits being paid is not more than what is legitimately due the disabled man. [The one who is really being defrauded is the caretaker brother, but it sounds like he is aware of what is going on and is a willing participant because he believes it is in his brother's best interest.]

So, if you really believe that the disabled man is being well cared for by his brother, and if you are in a position of enough authority within the family that the parties involved would listen to you, why not suggest the following:

- The current arrangement "goes legit" ... In other words, the caretaker brother becomes the guardian or official caretaker of the disabled brother. The new arrangement is reported to the government; the caretaker brother starts receiving the benefits, he pays all of the disabled man's expenses, and he claims him as a dependent if that is allowed legally*.

- In order to get "Mommy Dearest" to agree, caretaker brother offers to throw her a bone. He gives her $100 a week, or whatever it takes to get her to go along with that arrangement. She would still be getting her $ (which it seems is what she cares about the most). The caretaker brother is obviously already paying some of his brother's upkeep, so he'd probably come out even.

- Most importantly, everything would be above-board, and the disabled man would not be in danger of being taken away. Also, when the mother dies the new care arrangements would already be in place.

That is what I would do if I were "Arbitration Queen For A Day" and could make the decision for your family.


*Regarding claiming the disabled man as a dependent, it's not a gimme that is even allowed. My brother is DD and since he graduated high school and started working part-time, no one claims him as a dependent. He files his own tax return (I prepare them for him) and he takes his own personal exemption.

Good luck and I hope everything works out for your relative!

[DebbieL]

I pity you for having such a sickening woman for a relative. She somehow managed to give birth to a really decent man that is caring for his brother. I think the money should be going to him, of course. I think that she is one of those women who would yank the "meal ticket" - I mean son, back into her home at the first threat of cutting off that check. I don't envy your position.

[cptacek]

This one hit a nerve with me, so I've been mulling it over for awhile.

Thank you. I appreciate you really thinking about this situation and how it will have an effect on everyone. (that goes for the rest of you too, but scfr says it explicitly)

1. The needs of the disabled man is the primary concern, no matter what other family garbage may be going on.

I agree.

The very worst thing that could happen to him would be if the government found out what was going on and made him a ward of the state, forcing him in to some undesirable institution or group home.

Could this happen !?!? I just thought the mother would get in trouble. If this is the case, then this is more serious than I thought.

2. Benefits that truly help out people in need, such as social security disability, are good things.

Yes, when they are used as they should be used.

3. People who try to milk the system and take advantage of above-mentioned benefits are pond scum.

Again, I agree with you.

4. Without knowing 100% of the facts, while it does sound like while the mother is defrauding the system, overall the taxpayers are not being defrauded because the total amount of benefits being paid is not more than what is legitimately due the disabled man. [The one who is really being defrauded is the caretaker brother, but it sounds like he is aware of what is going on and is a willing participant because he believes it is in his brother's best interest.]

Could the brother get in trouble for this? He is providing a good home, good meals, a good family life, and even though it is a very simple life, he basically treats him like a son. If the brother could get in trouble for this, then, again, this is more serious than I thought.

- The current arrangement "goes legit" ... In other words, the caretaker brother becomes the guardian or official caretaker of the disabled brother. The new arrangement is reported to the government; the caretaker brother starts receiving the benefits, he pays all of the disabled man's expenses, and he claims him as a dependent if that is allowed legally*.

This is what we all want, but as DebbieL says, she might want to take the son back just for the money, and he DOES NOT need to live with her. Actually, the mother has said that if she dies before the disabled son does, then the brother will become the guardian and the benefits and life insurance policy will be changed to him. First of all, he doesn't need a life insurance policy, and second of all, why wait? Anyway, that is another example of where the mother's mind is.

[Joan.of.the.Arch]

The disabled man might be able to ask for his brother to be made his payee and/or guardian. There may be two different issues here--1) a court-appointment of the mother as guardian, and 2) a Social Security paperwork matter as to who shall receive the money on behalf of the payee. Sometimes the court appoints payees who get to take a fee out of the disabled, "incompetent" person's disability support payment. In fact there are people who are payees collecting fees specifically for the purpose of supplementing their own income. If the mother is not a court-appointed payee, then the disabled man may be able to simply change the payee to his brother.

I was the payee for a woman of low intelligence--that was her disability and the reason for being required to have a payee. But I did not take a fee out of her check. (In fact it cost me a little money in car use to go to the bank a couple times a month and go to her house to give her cash, take her shopping for clothes, food, etc., and to hand deliver a rent payment to the landlord.) However, some people have payees who are not "incompetent"--it is just that it is prohibitively physically difficult for them to take care of their own finances and shopping. People who voluntarily have a payee can get the payee changed at will. At least this was the case several years ago. I should think that with the internet, more disabled people can handle even more aspects of their finances by themselves, so it would make sense that being able to change payee at will is still possible.

By the way, I sympathize. I stopped being the payee for my friend when her sister came onto the scene wanting to help. Funny, this sister was never there for her until there was money to be had. Three months later, my friend became homeless--literally on the streets, filthy, and eating who knows what. During that time, I'd had no contact with my friend as her sister apparently convinced her that all along I had been stealing from her check. In reality, the sister did just that.