In 2016 the IRS Gains New Tax Enforcement Powers, Including Passport Revocation & Use of Private Debt Collectors
The IRS budget has essentially been under siege as year-after-year Congress has slashed the organization’s budget. The impacts of the budget shortfall are quite obvious. Since the peak number of agents was reached in the early to mid-1990s, the agency has lost tens of thousands of employees. In fiscal year 1992, the IRS was staffed by approximately 118,000 employees. By 2012, the number of agency employees had fallen to about 90,000 – a 23 percent decrease. The IRS’s 2015 budget request was authorized, and, despite a loss of manpower, new technology has permitted the IRS to do more with less. However, cracks are beginning to show in the organization’s ability to perform its job in the form of long wait times for callers, “disconnected” calls, a SIRF scandal, and numerous other issues.
Perhaps it comes as no surprise, then, that Congress is providing the agency with additional leverage in the form of passport denial and revocation. Provisions regarding the use of private debt collectors to pursue tax debts could provide an infusion of manpower for the agency. Still, there are real concerns regarding the Constitutionality of the former initiative and privacy and identity theft concerns regarding the latter initiative.
If you have questions regarding new or existing IRS enforcement measures, an experienced Roseville tax attorney of Newpoint Law can help. We can assist with unpaid taxes, unfiled taxes, errors, income tax audits, and a broad array of tax concerns. To schedule a free and confidential consultation, call us at 1-800-358-0305 or contact us online.
IRS Gains Passport Denial & Revocation Powers for Seriously Delinquent Tax Debt
The IRS is now permitted to compile a list of “seriously delinquent” taxpayers and submit their information to the U.S. Department of State. Individuals who appear on this list are subject to passport denial and other limitations on their ability to travel. This ability was derived from the passage of Fixing America’s Surface Transportation Act (FAST Act) which is chiefly a transportation funding bill. However, a number of revenue-raising provisions were attached to the bill.
This revenue provision allows the IRS to report “seriously delinquent” taxpayers. A seriously delinquent taxpayer is a person who owes more than $50,000 in tax debt. While $50,000 sounds like a rather generous threshold, in reality it provides less room for error than one would initially think. This is because the $50,000 limit also includes penalties and interest that are imposed on the unpaid tax obligations. As these penalties can add-up incredibly quickly, taxpayers may find themselves on the wrong side of $50,000 significantly more quickly than they expected.
Taxpayers will not be subject to this enforcement action until the tax debt is established as due and owing. That is, taxpayers who are appealing a debt or who have not yet received a notice of lien regarding their debt should remain unaffected for the time being. However, the IRS files liens against taxpayers regularly and routinely as a means of putting creditors on notice.
IRS Will or Must Use Private Debt Collectors in 2016
Also contained within the FAST Act is a provision that authorizes or requires the IRS to make use of private debt collectors for certain tax debts. However, private collectors are prohibited from collecting on certain types of tax debts. Debts where private collectors are prohibited include:
- Instances where innocent spouse relief has been granted.
- An offer-in-compromise or installment payment plan has been authorized or proposed.
- The taxpayer is pursuing an appeal through IRS Appeals.
- The taxpayer is involved with an IRS enforcement action such as an audit, criminal investigation, levy, or tax litigation.
- The taxpayer is deceased.
- The taxpayer is currently deployed to an active combat zone.
- The taxpayer is a victim of identity theft.
That being said, when certain circumstances are true the IRS is required to make use of a private debt collector. If a tax debt has not been collected because of a lack or IRS resources, one-third or more of the limitations period on tax collection has already passed, and the debt was assigned for collection but no action has been taken for at least a year, the IRS must use a private collector.
Rely on an Experienced Roseville Tax Attorneys for Unpaid Taxes
Now in 2016, the IRS has gained a number of new enforcement powers to pursue and make life difficult for taxpayers who have fallen behind on their taxes. To schedule a free and confidential consultation with an experienced Roseville tax attorney from Newpoint Law, call 800-897-3915 today or contact us online.