IRS urges taxpayers with traveling plans to resolve tax debts. . .
On August 8, the Internal Revenue Service warned taxpayers to resolve their significant tax debts to avoid limiting the availability and use of their passports. Taxpayers should contact the IRS now to avoid delays in their travel plans later. Taxpayers should not delay because some resolutions may take longer than others. A tax professional may offer invaluable assistance with this type of matter.
Under the Fixing America’s Surface Transportation (FAST) Act, the IRS notifies the State Department of those taxpayers certified as owing a seriously delinquent tax debt, which is currently $52,000 or more.
The law then requires the State Department to deny their passport application or renewal. If a taxpayer currently has a valid passport, the State Department may revoke the passport or limit a taxpayer’s ability to travel outside the United States.
The IRS also will not certify a taxpayer as owing a seriously delinquent tax debt or will reverse the certification for a taxpayer who’s in bankruptcy, who’s identified by the IRS as a victim of tax-related identity theft, whose account the IRS has determined is currently not collectible due to hardship, who’s located within a federally declared disaster area, who has a request pending with the IRS for an installment agreement, who has a pending offer in compromise with the IRS, or who has an IRS accepted adjustment that will satisfy the debt in full.
The IRS may ask the State Department to exercise its authority to revoke a taxpayer’s passport. For example, the IRS may recommend revocation if the IRS had reversed a taxpayer’s certification because of their promise to pay, and they failed to pay. The IRS may also ask the State Department to revoke a passport if the taxpayer could use offshore activities or interests to resolve their debt but chooses not to.
For taxpayers serving in a combat zone who owe a seriously delinquent tax debt, the IRS postpones notifying the State Department of the delinquency and the taxpayer’s passport is not subject to denial during the time of service in a combat zone.
UPDATE: The Commissioner of the IRS, Charles Rettig, has granted a reprieve for some taxpayers who may have been certified and, thus, unable to use their passports.
Acting National Taxpayer Advocate Bridget Roberts has issued a memo (TAS-13-0819-0014), effective July 25, 2019, that details “a temporary change” related to the revocation of passports for taxpayers working with the Taxpayer Advocate Service. The memo states that all open TAS cases with a certified taxpayer will be decertified, while any new TAS taxpayer cases will be systemically decertified.
Tax professionals look for these warning signs of data fraud
Tax professionals must keep a vigilant eye for the following unusual scenarios that have affected law and accounting firms across the country, potentially jeopardizing data of the company and their clients. The IRS and Summit partners have created a list of warning signs that a tax professional may have experienced data theft:
- Client e-filed returns begin to be rejected by the IRS or state tax agencies because returns with their Social Security numbers were already filed;
- Clients who haven’t filed tax returns begin to receive taxpayer authentication letters (5071C, 4883C, 5747C) from the IRS to confirm their identity for a submitted tax return.
- Clients who haven’t filed tax returns receive refunds;
- Clients receive tax transcripts that they did not request;
- Clients who created an IRS Online Services account receive an IRS notice that their account was accessed or IRS emails stating their account has been disabled. Another variation: Clients unexpectedly receive an IRS notice that an IRS online account was created in their names;
- The number of returns filed with the tax professional’s Electronic Filing Identification Number (EFIN) exceeds the number of clients;
- Tax professionals or clients responding to emails that the firm did not send;
- Network computers running slower than normal;
- Computer cursors moving or changing numbers without touching the keyboard;
- Network computers locking out employees.
It is of the utmost importance when facing these tax-related issues and concerns to consider the assistance of an experienced tax attorney. If you live in the New York or the Tri-State area and are facing any of the questions or scenarios presented above, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com. For a FREE consultation, call 212-490-0704.
