On behalf of Janathan L. Allen, APC posted in IRS on Wednesday, December 9, 2015.
Many California residents — in fact, scores of millions of Americans across the country — regularly scratch their heads over politics as they are played out on Capitol Hill.
In fact, much about the country’s lawmaking process can seem a veritable question mark, including how legislative bills become enacted as laws.
Here’s an example from the realm of tax that many of our readers across Southern California might reasonably find just a bit counterintuitive.
A new provision was recently added to the Internal Revenue Code, namely, section 7345. Formally entitled “Revocation or Denial of Passport in Case of Certain Tax Delinquencies,” the law’s details are spelled out on page 1,113 of the … federal highway funding bill?
A logical nexus between roadway infrastructure and the exercise of IRS power pertaining to alleged delinquent tax debt might not seem immediately apparent and, well, it isn’t.
Furthermore, and as noted in a recent Forbes article, the provision itself “upsets some people.”
Here’s why. The passport law reportedly grants the IRS plenary power to order the revocation or denial of a passport (through the State Department) to any person the agency determines owes more than $50,000 in back taxes.
And that amount can include penalties and interest that the IRS states are owed. As Forbes points out, that can be patently unfair, given that many people contest tax bills and that, for obvious reasons, penalties should not be tacked on to a bill while a tax matter is still outstanding.
The writer of the Forbes article rightly points out that, “The right to travel has been recognized as fundamental.”
And that logically begs this question: Is the IRS overstepping constitutional limitations on its powers when it seeks to deny that right based upon an alleged tax debt?
That is an interesting and important question. Forbes notes that “it is not clear that [section 7345] will pass the constitutional test if it is challenged.”
Persons with any question or concern regarding a tax-related matter can obtain candid guidance and strong legal representation from a proven tax attorney.
