Cheat Sheet Q&A:


Today’s topic:  Seized tax returns due to Social Security overpayment


The entry: 


I’m a minor, my aunt (legal guardian) received the (Social Security) benefits.  My tax return was taken this year as Social Security claims there was an overpayment (to his aunt).  


Bottom Line:  So this note was in response to a story we covered on the Morning Rush recently… The Social Security Administration in conjunction with the IRS had a three year program in which they were seizing the tax returns from the children of Social Security recipients.  These cases involved parents who had been determined to have had overpayments received at some prior point in time.  To get back the overpayment, the tax returns of not only the parents (if they had one coming to them) but also the children of these parents (or in the case of today’s listener – a legal guardian) were being seized.  All told $1.9 billion in seized tax refunds had occurred over the prior three years. 


As egregious as the program seemed…  Apparently the Government agreed.  As soon as news of this program hit nationally last week, the IRS and Social Security Administration said they were ending this initiative.  I suppose that won’t help the listening who submitted today’s note but hopefully it does mean that it’s really over.  But as Reagan would say…  This is a “trust but verify” situation and that’s being generous.  If this has happened to you let me know & I’ll stay on top of this story to ensure that it indeed extinct. 


If you have a topic or question you’d like me to address email me:


Audio Report:



The foods that have risen the most in price over the last year: 


Bottom Line:  There are two different types of inflation.  What’s called core inflation.  That’s the cost of good and services ex food and energy.  It also happens to be the one that the Federal Government uses for policy and taking point purposes.  Core inflation is relevant but only if you don’t consume energy or food.


The Feds like core because food and energy prices are volatile.  That’s true but if the volatility is consistently in the upward direction then it’s a very real issue that’s going unaddressed.  Through QE (or money printing) we’ve been undermining the value of the US dollar resulting in less buying power for each dollar in your pocket.  That’s not the entire reason for the increase in prices for food and energy but it’s a significant part of the issue.  Over the past year here are the food items that have risen the most in price:

Average increases vs. 1 year ago:


  • Chicken:  5%
  • Grapefruit:  6%
  • Wine 8%
  • Beef:  8%
  • Turkey 9%
  • Bacon: 13%
  • Oranges:  23%

While wine and grapefruit may not be staples of the average American’s diet, all of the others are staples.  With the average income growth at 2% this year over last, food inflation is not just a myth or isolated to one food item.  It’s a very real issue for the average American at this point.  Add in higher gas prices and you have a recipe for reduced consumer spending on discretionary items as every day life is simply much more expensive.

Audio Report:



Even if the drivers around you are safe - the cars aren't:


Bottom Line:  We seemingly live in the age of auto recalls.  The past five years have been record setting in terms of recalls being issued.  We’re in the mist of more right now with the largest being the GM 2.6 million car recalls that started over problems with ignition switches.  Among the problems with auto parts that have necessitated recalls over the past five years…


  • Brake failures
  • Frozen accelerators
  • Random airbag deployment
  • Exploding gas tanks
  • Faulty ignition switches

And that’s just a starter list.  So how many of these millions of recalled vehicles are actually being fixed?  About half… 

According to the Center for Auto Safety only 52% of recalled vehicles are fixed.  The two biggest reasons why 48% are never fixed? 


  • Car owners are unaware or ignore the notices
  • Most car owners use non-dealer mechanics after a car’s factory warranty expires

Audio Report:



Hmm...  Not so fast Medicare reimbursement rates haven't changed since the 90's:


Bottom Line:  So I was reading another Medicare reimbursement related story yesterday when something dawned on me.  I’ve gone along with the story flow in recent years without conducting any research regarding specific reimbursement rates of Medicare to doctors.  It’s been easy to accept the premise that reimbursement to doctors hasn’t been keeping pace with the rising cost of healthcare because of cuts in the rate of growth in spending in Medicare several times over the last decade. 


It’s difficult to measure the change in reimbursement in part because we spend more on Medicare every year, the question is simply if the increases are keeping up with the cost increases of those healthcare procedures they’re paying for on behalf of us.  So I took a look at the reimbursement rate of Medicare as compared to traditional insurance companies.  The initial takeaway:


  • Private insurance companies pay significantly more on average than Medicare does for the average medical bill

So doctors and hospitals are correct in citing the underpayment of Medicare relative to the most common form of payment for medical services…  But here’s the thing.  I went back to 1999 when the number of doctors who accepted Medicare was still in the high 80 percent range. 


  • In 1999 Medicare paid about 80 cents on the dollar for like medical services paid by private insurance companies


  • In 2013 Medicare paid about 80 cents on the dollar for like medical services paid by private insurance companies

So…  That’s interesting isn’t it.  Perhaps reimbursement levels on a relative basis have been reined in a bit as well but the ratio for Medicare payouts compared to insurance hasn’t changed at all while many doctors have opted out.  Now perhaps the paperwork and bureaucracy of dealing with Medicare is a big part of the story as well but there appears to be more to the story than just the way its been portrayed to us. 


Audio Report:


We've voted...  The ads we hate the most:


Bottom Line:  In the Consumer Reports annual report on advertising, they’ve broken out the advertising we dislike the most in our everyday lives.  Here are the results. 


The five types of ads we hate the most:


  • Claims of medical “miracles”
  • Online pop-up ads
  • Mail that looks like something official but isn’t
  • Claims of having won a prize or sweepstakes
  • Robocalls

 The form of advertising we dislike the least: 


  • Billboards


Audio Report: