While much effort has been put forward by CPA Firms like Professional Tax Resolution to warn of the potential dangers of fraud regarding the IRS’s new use of private debt collection agencies, there has been little discussion of another provision introduced at the same time through the FAST Act. Much more out of the control of individual taxpayers, this provision sees the State Department teaming up with the IRS to revoke or suspend passports due to unpaid and unresolved taxes.
Earlier this year, the IRS provided insight into how the program will effect those with outstanding taxes. Section 32101 of the FAST Act allows the Secretary of Treasury to provide the Secretary of State with a list of “seriously delinquent taxpayers.” This list will acted upon with denial, revocation, or limitation of the passports of those listed. Those to be titled “seriously delinquent”will have had a Notice of Federal Tax Lien filed (with appeal rights lapsed or exhausted) or a levy has been issued on an assessed liability of $50,000 or more.
If a taxpayer has been working to resolve past-due taxes, and has created an installment agreement or Offer in Compromise, has exercised Collection Due Process Rights, or has had collection stopped, he or she will not qualify for IRS certification. If you happen to find yourself on this list, you’ll be able to get yourself back off with any of the above options that we can discuss in greater details when you contact Professional Tax Resolution. The law allows for removal from such a list within 30 days of liability satisfaction or any of the above.
It’s still difficult to see how this type of a penalty will actually be put into effect for delinquent taxpayers. Just how seriously will the IRS take “serious” liabilities? Will they have the manpower with recent budget cuts to do the appropriate due diligence? How often is this list updated and compiled? HOW will the list be compiled? Can the IRS keep up? As we wait to see how the use of private debt collectors will shake out for the IRS, we wait also on the answers to these questions regarding delinquent tax penalties.
We’ll be keeping a close eye on the developments from Washington. In the meantime, if you have tax questions or a tax debt you are unable to pay, our experienced tax settlement professionals are happy to discuss your tax resolution options free of charge. For more information about our services, visit us today at www.professionaltaxresolution.com or call us at 877.889.6527. Our CPAs, Enrolled Agents and other skilled accountants have a thorough understanding of tax law together with the experience necessary to know which tax settlement option will be the best fit for your specific set of circumstances.