The most formidable collection agency in the world, the IRS, just got more leverage to collect delinquent tax debt. In an article titled: “Tax Double Whammy IRS Can Revoke Passports and Uses Collection Agencies,” Forbes contributor Robert Wood explains how the IRS was recently granted through legislation the ability to 1) use collection agencies to do its collecting and 2) to revoke passports to collect back taxes.
New legislation requires private companies to collect IRS tax debt in some cases.
The recently added section 7345 of the Internal Revenue Code is called the “Fast Act”. Wood outlines three conditions that would result in private debt collection. They are as follows:
1) The tax bill is not being collected because of a lack of IRS resources or the IRS’s inability to locate the taxpayer.
2) More than 1/3 of the statute of limitations expired, with no IRS employee assigned to collect it.
3) The tax bill has been assigned for collection, and more than a year has passed without any interaction.
Many are not happy about the required use of private collectors specifically, because taxpayer financial data held in private hands.
The Fast Act also gave the IRS power to revoke passports.
In a new section 7345 of the tax code called “Revocation or Denial of Passport in Case of Certain Tax Delinquencies,” the State Department was granted the authority to revoke, deny or limit passports for anyone the IRS designates as having delinquent tax debt in excess of $50,000. Wood notes that passports could also get revoked merely because the taxpayer owes more than $50,000 and the IRS has filed a notice of lien.
This kind of legislation shows that Congress wants more back tax money collected and they are taking major steps to make that happen. Don’t risk your ability to travel or live in the shadows! It’s always best to come clean with the IRS and seasoned tax resolution professionals to discuss your options and get you back on solid financial footing.
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