The IRS has always been a federal government agency that can strike fear into the hearts of taxpayers. Most people are happy to minimize their dealings with the IRS and the threat of an IRS audit and examination is enough to encourage most taxpayers to comply with their tax filing and payment obligations. However, some taxpayers still attempt to push the envelope and avoid their lawful tax duties. These taxpayers are apparently numerous enough that Congress has decided to grant the IRS new enforcement powers. Unfortunately, the new authority provided to the IRS has the potential to make life significantly more difficult for taxpayers who owe large or certain types of tax debts to the U.S. government.
These new powers granted by Congress are the IRS power to revoke passports and the ability to make use of private debt collectors to secure payment. Taxpayers with large debts already face significant challenges in securing relief while attempting to carry on with their life and endeavors. These new changes are likely to make this process even more difficult and painful for those taxpayers who fail to file or who otherwise fall behind on their tax obligations.
Individuals seeking assistance with unpaid taxes and unfiled taxes should contact an experienced tax lawyer in Los Angeles. Robert Hoffman is experienced and routinely negotiates with and litigates against the IRS. To schedule a free and confidential legal consultation call 800-897-3915 today or contact us online.
IRS Gains Power to Deny Passport Renewal for “Seriously Delinquent” Tax Debt
As part of the five-year infrastructure spending bill known as Fixing America’s Surface Transportation Act (FAST Act), a provision was included that granted the IRS the ability to revoke, deny, or limit the passport of individuals who are “seriously delinquent” on their taxes.
The IRS considers individuals who have accrued more than $50,000 in unpaid tax debt to be “Seriously delinquent.” Unfortunately for noncompliant taxpayers, this $50,000 threshold is inclusive of all fines and interest. Interest, penalties, and fines can add up extremely quickly so the $50,000 threshold doesn’t provide quite the cushion that one might expect. However, the tax must actually be due and owing. If a taxpayer is appealing a proposed tax debt through administrative or court proceedings, this potential liability is not counted because it is not yet a debt.
This enforcement power will take effect when the IRS files a notice of lien against the taxpayer. The IRS files tax liens routinely to put creditors on notice. The IRS will provide the names of taxpayers who are seriously delinquent to the U.S. State Department. While exceptions exist for taxpayers who are traveling to escape a humanitarian crisis and for those who are dutifully making payments as part of a payment plan, it is unclear how these exceptions will work. Furthermore, in light of discussions that may require passports for even domestic flights, this enforcement mechanism may prove to have particularly harsh consequences. Since California’s license is believed to be noncompliant and is currently under review for an extension, this enforcement mechanism may impact California taxpayers in the near future.
New Law Permits or Requires the Use of Private Debt Collectors
Despite widespread fraud and scams from individuals purporting to be “calling on behalf of the IRS” Congress nevertheless authorized private debt collectors to pursue taxpayers for certain unpaid tax debts. Furthermore, Congress seems to have failed to consider how placing taxpayer data in the hand of third-parties is likely to further exacerbate the problem of stolen identity tax return fraud (SIRF). Furthermore, there are certain scenarios where a private tax collector must be used. When the following three items are true the IRS must use a private collector:
- The debt has not been collected because of a lack of IRS resources or an inability to locate the taxpayer.
- At least one-third of the limitations period has already elapsed.
- The tax bill was assigned for collection but no action has been taken and more than a year has passed.
When these three items are true, it is highly likely that you will soon face a private debt collector.
Rely on an Experienced Tax Lawyer
If you are facing a serious tax liability, are seeking tax relief, or need advice regarding a tax enforcement action the Hoffman Law Offices may be able to help. Robert Hoffman is an experienced Los Angeles tax attorney who is experienced in handling serious tax issues. To schedule a free and confidential initial consultation call 800-897-3915 today or contact us online.