My hubby is CPA with a masters degree in tax accounting. He has practiced as a tax accountant for forty-five years. That is a lot of years. He recently heard a comment from a congressperson regarding Social Security that has compelled him to clarify the Social Security issue or non-issue.
LEECHES OR BENEFICIARIES?
By Loren McCann CPA, MS Tax
I recently read where one of our Congressmen accused Social Security recipients of sucking on the government welfare teat and being one of the major causes of the government’s financial crisis. This Congressman seemed unaware that Social Security is a trust fund set up for the benefit of those designated as beneficiaries. Trust law is one of the better defined bodies of law. Trustees are legally bound to manage a trust for the sole benefit of the beneficiaries. Trustees are prohibited from self-dealing or in any way diverting the funds to anyone other than the beneficiaries. The Internal Revenue Service recognizes these rules quite well in their efforts to collect taxes that have been withheld from workers and held in trust for the Federal Government by the employer. If the employer does not pay over the trust funds withheld, the IRS will assess a penalty on the person or persons who should have been acting as trustee for the funds. And lest you think the function of trustee is not viewed seriously, the penalty is 100% of the taxes withheld from the employees and not paid to the government.
When our Congresspersons talk about the Social Security Trust Fund, they do not seem to know what a trust is or what their responsibility as trustees is. Rather than decrying the payment of the funds to the beneficiaries, they should be trying to secure the principal so that those beneficiaries receive the funds that have been (or should have been) set aside for them. As trustees of the funds, they are responsible to see that the funds are available when needed. We as the people of this nation need to hold Congress responsible, not letting them try to avoid their duty by blaming someone else or re-defining the purpose of Social Security to the detriment of the intended beneficiaries.
Loren McCann
LEECHES OR BENEFICIARIES?
By Loren McCann CPA, MS Tax
I recently read where one of our Congressmen accused Social Security recipients of sucking on the government welfare teat and being one of the major causes of the government’s financial crisis. This Congressman seemed unaware that Social Security is a trust fund set up for the benefit of those designated as beneficiaries. Trust law is one of the better defined bodies of law. Trustees are legally bound to manage a trust for the sole benefit of the beneficiaries. Trustees are prohibited from self-dealing or in any way diverting the funds to anyone other than the beneficiaries. The Internal Revenue Service recognizes these rules quite well in their efforts to collect taxes that have been withheld from workers and held in trust for the Federal Government by the employer. If the employer does not pay over the trust funds withheld, the IRS will assess a penalty on the person or persons who should have been acting as trustee for the funds. And lest you think the function of trustee is not viewed seriously, the penalty is 100% of the taxes withheld from the employees and not paid to the government.
When our Congresspersons talk about the Social Security Trust Fund, they do not seem to know what a trust is or what their responsibility as trustees is. Rather than decrying the payment of the funds to the beneficiaries, they should be trying to secure the principal so that those beneficiaries receive the funds that have been (or should have been) set aside for them. As trustees of the funds, they are responsible to see that the funds are available when needed. We as the people of this nation need to hold Congress responsible, not letting them try to avoid their duty by blaming someone else or re-defining the purpose of Social Security to the detriment of the intended beneficiaries.
Loren McCann
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