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Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

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Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#51

Post by duxup »

mdorazio wrote: post #18
ci5er wrote: post #16

Earlier quoted context omitted.

If you live and work overseas, the IRS commonly miscalculates money owed. This can leave one stranded through no fault of their own and/or seriously interrupt a career. This law doesn't only sweep up tax evaders...

How much are you making that a miscalculation leads to an erroneous $51,000 tax bill beyond what you supposedly already paid?

I rolled over a 401k... they thought I cashed it out. It was more than 51k that the IRS thought I owed them.

Having said that the issue was resolved quickly and I'm not sure them just contacting me and waiting for a response would trigger the law in question.

This law could be insanity, or quite reasonable depending on the details.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#52

Post by abecedarius »

duxup wrote: post #47
pembrook wrote: post #32

Have a feeling this will end up extorting American expats and people who grew up abroad without ever living or working in the US (who are only US citizens because of their parents). When FATCA was passed, it flipped a switch that automatically made tens of thousands of people around the world who have never set foot in the US into criminals by default since they'd never filed US taxes (the US has the only global taxa…

I wonder how likely it is people would renounce their citizenship.... that US passport / citizenship is pretty powerful.

FATCA seems like a great incentive.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#53

Post by pokemongoaway »

T-R wrote: post #42
yani wrote: post #9

Earlier quoted context omitted.

To answer my question, it is intended for expats living abroad.

Which is doubly disgusting, since the US is one of the only countries that double-taxes its expats.

Exactly! And then spend barely any of that tax money on what real Americans want!

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#54

Post by king_nothing »

And so the totalitarian demagogue builds their “Berlin wall” to keep citizens in... anyone crossing will be shot. Any unapproved thoughts or speech will lower one’s social credit, eventually making them ineligible for travel, banking, voting, government services, etc... too low and they will be sent to reeducation camps. Parents and children split apart and sent to concentration camps. Blaming certain groups for a country’s problems. Where have I heard this before? hmm.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#55

Post by ta1234567890 »

refurb wrote: post #33
duxup wrote: post #26

Earlier quoted context omitted.

I've had a couple run ins with the IRS as well where they thought I retired (nope) or did something I didn't do. It was pretty easy to resolve by paper for me, couple letters back and forth, but yeah it takes a while. Fortunately the IRS was good about it all. I wonder though if they're still investigating (sending me letters and I am responding) if it counts as owing them as far as this law goes? From what I remembe…

That’s what I’ve heard as well. Continue to engage the ITS and they are pretty reasonable and it takes time for them to enact any penalities. Ignore them? They drop the hammer pretty quickly.

I've had some close encounters with both the BOE (California's tax agency) and the IRS.

Both operated pretty similarly, basically assuming we owed taxes unless we could prove otherwise (which is technically illegal since they have the burden of proof initially). They accused us with no proof, to intimidate us into handing over documents which they then used to build their case against us.

Lawyers and accountants only offered to "negotiate" installments as the only help they could provide (and charging $$$$).

In the end we won both times by researching the law, past cases, internal procedures, filing FOIA requests, gathering evidence and responding accordingly. In one instance they were being super unreasonable and unresponsive until we filed a request to go to court, at which point they became much more amicable and willing to "solve" our case.

INAL, but if I had to deal with this stuff from the beginning again, knowing what I know now, I would not hand over any documents until it gets to the point where they either drop the case or make a tax assessment that allows me to request to go to court. At that point they don't have anything, I have all the documents and I know I've done nothing wrong.

It's a stressful strategy to execute (nobody wants to have a tax agency going after them), but probably the cleanest.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#56

Post by nradov »

mankash666 wrote: post #10

I've had 2 instances where the IRS erroneously concluded that I owe them large tax bills. It took a few months of back and forth paperwork and phone calls to resolve, and have the IRS note on paper that I owe them nothing. With this law, an erroneous IRS decision can limit passport issuance and international travel. Three letter agencies are probably salivating at the prospect of 'errors' in possible suspects. This j…

Passport denials don't occur immediately. The law provides for a grace period exactly because of situations like yours.

I had the same thing happen once due to a clerical error by my employer's new payroll service. The IRS was actually quite helpful, and immediately put a hold on any penalties or extra taxes when I called and explained what happened.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#57

Post by perl4ever »

ci5er wrote: post #30
duxup wrote: post #27

Earlier quoted context omitted.

Not a huge chance of that occurring though. Not that many people do that and have the appropriate tax issue for 51k or more...

Of the two or three dozen Americans I have met working overseas for an extended period over the last 25-or-so years, I don't think I know of one that hasn't had it happen at least once... Most end up hiring KPMG (or some such firm -- which is not cheap) to end up doing the filings and follow-up, just so it never (ever) falls through the cracks again... EDIT: There are about 5M Americans working overseas. At an error…

"Most end up hiring KPMG" sounds to me a bit odd, like someone saying "My car was overdue for an inspection so I hired GM like most people".

I don't have experience in this exact situation, but I asked a friend who she recommended for tax advice not long ago, and it wasn't one of the Big 4.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#58

Post by adventured »

pembrook wrote: post #32

Have a feeling this will end up extorting American expats and people who grew up abroad without ever living or working in the US (who are only US citizens because of their parents). When FATCA was passed, it flipped a switch that automatically made tens of thousands of people around the world who have never set foot in the US into criminals by default since they'd never filed US taxes (the US has the only global taxa…

> I'm sure we'll see the already record-high numbers of people renouncing their US citizenship accelerate.

That sounds like a big deal, until you see how trivial the number is: 6,000 to 7,000 people per year, or 0.003% of US adults.

The US hands out about one million green cards per year. There are typically five million or more green card applications pending in a given year.

150x more immigrants become citizens every year, versus the number of people that renounce their US citizenship. The US could triple that number any time it wanted to.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#59

Post by king_nothing »

oculusthrift wrote: post #15

For everyone freaking out about this consider that half the country doesn’t owe the irs any money because they make too little. So poor people are by definition unaffected. In addition, not paying taxes is literally illegal so not sure why you should be able to blow money on vacations to europe when you are breaking the law and owe the people of the united states money.

The subtle shift is from purely civil penalties (ie garnishment, collections, seizing funds) to denying rights. There might not be a resurgence of debtors’ prison (except for unpaid alimony/child support) but other half-step curtainment of rights like voting are a real possibility.

PS: “Literally” is an unnecessary word.

Re: Thousands of Americans Will Be Denied a Passport Because of Unpaid Taxes

#60

Post by V-2 »

fyfy18 wrote: post #39
V-2 wrote: post #12

Earlier quoted context omitted.

But that's between you and this private company :) Plus, I think at least part of the reason why airlines would be reluctant to board you is exactly that - knowing that the destination country wouldn't be happy with them dropping you at their doorstep with no passport in hand. What would they care otherwise?

This is exactly it - the airline is responsible for returning you home if you are denied entry to a country. My wife used to work as an air stewardess, and one of her longer flights was a 16 hour non-stop flight from Dubai to Brazil. This involved a 3 day layover, and on the inbound flight she saw some (rather tired) passengers who had been on the outbound flight. Apparently they were denied entry, however it was too…

Right, so that goes back to my original point - it's other countries not letting a passport-less person in. The airlines have no other choice but to accept the fact.
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