IRS Now Using This “Powerful Tool to Force Tax Compliance”
Never mind the fact that the IRS itself has been unconstitutionally taxing most Americans for the past century.
If you are found to be delinquent in paying your taxes,the IRS can now revoke your passport, and prevent you from traveling until you’ve been cleared by the tax behemoth.
As USA Today reports:
A new enforcement provision passed by Congress and signed into law earlier this month allows the government to revoke the passports of seriously delinquent tax scofflaws — people who owe more than $50,000 to Uncle Sam.
“You could be on your honeymoon and they could revoke your passport,” said Tom Wheelwright, a certified public accountant and chief executive officer at ProVision Wealth Strategists in Tempe, Ariz.
Some details still need to be worked out, but the new passport rule indicates the government wants to get serious about collecting unpaid tax debts. The IRS reported 12.4 million delinquent accounts owing nearly $131 billion in assessed taxes, interest and penalties in 2014.
In addition to going after delinquent taxpayers by revoking their passports, the FAST Act highway-transportation bill signed by President Obama on Dec. 4 also gives private debt collectors a shot at forcing taxpayers to make good on their debts. The act includes a mandate that the Internal Revenue Service turn over certain unpaid tax delinquencies to private debt collectors.
The passport-revoking provision allows the Department of the Treasury and the IRS to authorize the State Department to take away U.S. passports from individuals with seriously delinquent tax liabilities. That’s defined as those greater than $50,000 and for which the IRS has filed a lien or levy, according to Matthew D. Lee of law firm Blank Rome. In a blog, he described the passport-revoking provision as a “powerful tool to force tax compliance.”Affected taxpayers would receive written notice.
Obviously, the emphasis is on revenue generation and the recovery tax money owed.
The rules have not all been worked out, but it appears that Americans who are already out of the country when their passports are revoked would likely be allowed to come back home.
But the larger issue is the overlapping of policies that are not always fair, which become even less fair when intertwined to enforce government policy – creating a serious risk of violating rights.
The threshold is $50,000, which initially seems like it would apply only to big fish; but when you factor in all the penalties and stacked fines that can be rapidly levied by the IRS, it really could happen to almost anyone. That might especially be true for expats, who often get caught up in tax liens when the IRS merely intends to investigate whether persons overseas have been paying their dues.
But the sudden loss of income, employment or mistakes in calculating tax liabilities could all factor into being unable to pay, and yet these individuals would likely lose their right to freely travel. USA Today notes:
Wheelwright views the $50,000 limit as low, adding that it wouldn’t take much to accumulate that much debt if a person lost a job or incurred big medical bills. It doesn’t help that it’s getting more difficult for people to contact the IRS, which is answering only about 40% of telephone calls from taxpayers, he said. Even tax professionals are looking at average phone waits of about 90 minutes, he said.
Many of the people with severely delinquent accounts are U.S. citizens who live in other nations, said Mark Luscombe, principal federal tax analyst at researcher Wolters Kluwer in suburban Chicago. Some have dual citizenship and might not worry about losing their U.S. passports. “They feel they can ignore a tax problem for a while.”
While the IRS is unlikely to abuse this new power in the short term, and most of the cases may involve individuals who are legitimately delinquent, there is little that would keep the IRS from doing so in the future.
Will members of the IRS, Treasury or State Dept. be caught piling on fraudulent tax liens or sums in order to penalize their political enemies, as well as dissidents (as Lois Lerner & co. did with Tea Party members) and shady individuals (whom, in theory, they might like to bust for tax evasion, but lack enough evidence to prove…)
The scenarios and possibilities for abuse are numerous, and there is every reason to think that this violates the spirit of the separation of powers, and represents a dangerous precedent for the IRS, who already stop at nothing to harass and eat out the substance of hardworking people in this nation.