Wednesday, February 26, 2020

TAS Updates Passport Certification Program Guidance

In a memorandum to Tax Advocate Service (TAS) employees TAS-13-1119-0016 11/19/2019, TAS has updated its advocacy guidance now that the IRS has stopped its temporary program under which it wasn't certifying taxpayers for passport revocation etc., if the taxpayer had delinquent tax debt but also had an open Taxpayer Advocate Service (TAS) case.
IRC § 7345 - Revocation or Denial of Passport authorizes (but does not require) the IRS to certify a taxpayer's seriously delinquent tax debt to the State Department for the purposes of passport denial, limitation, or revocation. A seriously delinquent tax debt is an assessed individual tax liability exceeding $50,000 (adjusted for inflation) for which either a notice of federal tax lien has been filed or a levy has been made. IRS must also send a decertification to the Department of State where the certification was in error or where there is no longer a seriously delinquent tax debt. (IRC § 7345(b))
The Internal Revenue Manual provides details as to how the IRS certifies and decertifies a taxpayer. (IRM 13.1.24)  
A Decertification Protects The Taxpayer's Passport From Being Denied, Limited, Or Revoked Merely Because of
a Seriously Delinquent Tax Debt.

The IRM also details how the TAS can open a case to help a taxpayer resolve a tax issue. (IRM (2/4/2015))
The National Taxpayer Advocate (NTA) has long advocated excluding certain taxpayers with TAS cases from passport certification.
On July 25, 2019, IRS announced that all open TAS cases with a certified taxpayer would be systemically decertified. New TAS taxpayers would also be systemically decertified. The IRS said that this decision was temporary and that new guidance would be issued once the IRS Commissioner makes a final decision on this issue. 
But in October 2019, the IRS found that excluding cases from certification solely on the basis that the taxpayer is seeking assistance from TAS could allow a "won't pay" taxpayer to circumvent the intent of the legislation to obtain or renew a passport. 

Following the review of relevant considerations regarding these procedures, the IRS determined that a blanket, systemic exception for anyone with an open TAS case is overly broad and could undermine the effectiveness of IRC § 7345 to collect a seriously delinquent tax debt. 
Now that taxpayers working with TAS will no longer be automatically protected from certification, TAS will work with the IRS to identify and resolve the seriously delinquent tax debts of these taxpayers.  
Taxpayers Who Have Already Taken Significant Steps
To Resolve Their Debt

Can Still Resolve Their Passport Issues By Contacting
 TAS, Who Can Request Manual Decertification.
The memo tells TAS employees to elevate a case to the employee's Local Taxpayer Advocate (LTA) if the case meets all the following criteria. The taxpayer has 1) Imminent foreign travel plans, lives abroad, or has another compelling need for the passport 2)A significant risk of being certified before TAS will be able to help resolve the taxpayer's debt; and 3) Taken demonstrable recent steps to get into compliance with the IRS that nevertheless fall short of the statutory and discretionary exclusions.  
Then IRM, Decertify the Debt with the Department of State, is superseded and replaced with the following: 
  1. Once the taxpayer meets a criterion for decertification under IRM, Reversal of Certification, review IRM to determine if the account will require manual decertification. If so, send an OAR to the SB/SE Passport Office seeking manual decertification.
  2. If the taxpayer has an imminent need for a passport as defined in IRM, Expedited Decertification, gather the supporting documentation described. If the IRS function that resolved the debt did not complete and sign page one of Form 14794, Expedited Passport Decertification, prepare the form for LTA signature on page one.
  3. Send an expedited OAR to *SBSE Passport Group mailbox, requesting that the taxpayer be decertified within one business day. Include the signed Form 14794 and the required documentation. If the OAR is not complied with timely, or if you disagree with the response, immediately elevate the case to your LTA for issuance of a TAO.
    If You Face This Problem, You Should Consult with Experienced Tax Attorneys, As There Are Several Ways Taxpayers Can Avoid Having the IRS Request That the State Department Revoke Your Passport. 
  Want To Keep Your US Passport?
Contact the Tax Lawyers at 
Marini & Associates, P.A.
for a FREE Tax Consultation Contact us at:
Toll Free at 888-8TaxAid (888)882-9243.

Tuesday, February 25, 2020

New EU Blacklist Adds Cayman Islands, Panama & Others

According to taxlinked the latest iteration of the European Union’s blacklist of non-cooperative tax jurisdictions was released earlier this week with several new additions including:
  • The Cayman Islands,
  • Panama,
  • Seychelles and Palau 
  • Fiji,
  • Oman,
  • Samoa,
  • Trinidad and Tobago,
  • Vanuatu and
  • the US territories including:
    • American Samoa,
    • Guam, and the
    • US Virgin Islands
as jurisdictions blacklisted by the EU for failing to do enough against tax avoidance and evasion.

According to the EU, the Cayman Islands, a UK territory, has been added for failing to set “appropriate measures” against these types of abuse and allowing companies to establish shell companies with minimal presence in situ. The Cayman Islands had previously been listed in the EU’s grey list but was demoted once it failed to implement the economic substance rules required by Europe.
Following The Addition Of The Cayman Islands To The EU Blacklist, EU Officials Warned The UK That It Would Not Tolerate Tax Abuse From Its Territories.
Jude Scott, Cayman Finance’s CEO, said in a statement, “The Cayman Islands has had a track record of meeting evolving global standards and that is expected to continue.”
“Just as approximately 30 other jurisdictions were removed after a taking the necessary actions, we look forward to the same happening with regard to the Cayman Islands. In the meantime, clients can continue to expect the usual high professional standards from their Cayman service providers that they have always received,” he added.

In addition to these new blacklisted countries, the following jurisdictions were removed from the EU’s grey list after successfully implementing the necessary regulatory changes to prevent tax abuse: Antigua and Barbuda, Armenia, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cabo Verde, Cook Islands, CuraƧao, Marshall Islands, Montenegro, Nauru, Niue, Saint Kitts & Nevis, and Vietnam.

Who's next to be put on this blacklist ... the US?

Have an International Tax Problem?

Contact the Tax Lawyers at
Marini & Associates, P.A.
for a FREE Tax Consultation Contact Us at:
or Toll Free at 888-8TaxAid (888 882-9243).



The IRS Is Coming to Your Home or Office To Discuss Paying Your Delinquent Taxes!

On February 11, 2020, we posted IRS To Begin Un-Announced Visits to Delinquent Taxpayers! 
Where we discussed that the IRS has announced, in Fact Sheet 2019-15, that it will begin visiting taxpayers who have ongoing tax compliance issues.
The IRS will focus its efforts in areas where there have been a limited number of revenue officers available due to declining IRS resources.
The First Face-To-Face Contact From A Revenue Officer
Will Almost Always Be Unannounced!
During the visit, the revenue officer will interview the taxpayer to gather financial information and tell the taxpayer what he or she needs to do to become and remain compliant with the tax laws. 

Now in Information Release 2020-34 and Fact Sheet 2020-2, IRS has announced that it is increasing the use of data analytics, research and new compliance strategies, including personal visits, to reach taxpayers and tax return preparers who have not filed federal tax returns.
Following the recent and ongoing hiring of additional enforcement personnel, IRS revenue officers (ROs) across the country will increase face-to-face visits with high-income taxpayers who haven't filed tax returns in 2018 or previous years. These visits are primarily aimed at informing these taxpayers of their tax filing and paying obligations and bringing these taxpayers into compliance.
IRS advises taxpayers that have delinquent filing or payment obligations that they should consult a competent tax advisor before waiting to be contacted by an RO.
IRS notes that high-income taxpayers who will receive these visits have typically received numerous letters from IRS over an extended period of time, so they generally realize they have a tax issue.
Here's what to look for when a legitimate IRS RO makes a face-to-face visit:
  • While most RO visits to a taxpayer are unannounced, ROs will always provide two forms of official credentials, both include a serial number and photo of the IRS employee. Taxpayers have the right to see each of these credentials.
  • A legitimate RO will explain the liability to the taxpayer, along with the consequences of failing to comply with the law. The IRS employee will not make threats or demand an unusual form of payment for a nonexistent liability.
  • Visits by ROs generally occur after numerous contacts by mail about an existing tax issue; taxpayers should be aware they have a tax issue when these visits occur.
  • The RO will request payment and will provide a range of payment options, including paying by check made payable to the U.S. Treasury.
IRS also announced that it is using the following new ways to leverage existing processes and systems: 
  • Increasing the identification and case creation for individual and business non-filers. New cases will be assigned to IRS employees for appropriate resolution. 
  • Automated Substitute for Return program (ASFR). This affects individual taxpayers who have not filed tax returns, but whose available income information shared with IRS indicates a significant income tax liability. As part of the ASFR program, IRS sends notices to these taxpayers alerting them to the potential liability.
  • Automated 6020(b) process. Promotes employment tax filing compliance by identifying business taxpayers with employment tax requirements who have not filed for a specific period.
  • Delinquent Return Refund Hold program (DRRH). Systemically holds an individual taxpayer's income tax refund when their account has at least one unfiled tax return within the five years surrounding that return. 
IRS Reminds Taxpayers That It Has A Number Of Options Available Under The Law When A Taxpayer Refuses To Pay, Ranging From A Series of "Civil Enforcement"
Actions And, When Appropriate,
Pursuing Criminal Cases Against Taxpayers.
IRS says that its compliance personnel are also now working more closely with IRS criminal investigators on priority compliance issues, including high-income cases. 

Have an IRS Tax Problem? 
Prefer That the IRS Not Show up at
Your Home or Office?
for a FREE Tax Consultation contact us at:
Toll Free at 888-8TaxAid (888) 882-9243



Friday, February 21, 2020

Individuals With Significant Tax Debt Should Act Promptly To Avoid Revocation Of Passports

On August 8, 2019 the Internal Revenue Service urged taxpayers in IR-2019-141, to resolve their significant tax debts to avoid putting their passports in jeopardy. They should contact the IRS now to avoid delays in their travel plans later.

Under the Fixing America’s Surface Transportation (FAST) Act, the IRS notifies the State Department (State) of taxpayers certified as owing a seriously delinquent tax debt, which is currently $52,000 or more. The law then requires State to deny their passport application or renewal. If a taxpayer currently has a valid passport, State may revoke the passport or limit a taxpayer’s ability to travel outside the United States.

When the IRS certifies a taxpayer to State as owing a seriously delinquent tax debt, the taxpayer receives a Notice CP508C from the IRS. The notice explains what steps the taxpayer needs to take to resolve the debt. IRS telephone assistors can help taxpayers resolve the debt. For example, they can help taxpayers set up a payment plan or make them aware of other payment options. Taxpayers should not delay because some resolutions take longer than others.

Don’t Delay!

It’s especially important for taxpayers with imminent travel plans who have had their passport applications denied by State to call the IRS promptly. The IRS can help taxpayers resolve their tax issues and expedite reversal of their certification to State. When expedited, the IRS can generally shorten the 30 days processing time by 14 to 21 days. For expedited reversal of their certification, taxpayers will need to inform the IRS that they have travel scheduled within 45 days or that they live abroad.

For expedited treatment, taxpayers must provide the following documents to the IRS:
  • Proof of travel. This can be a flight itinerary, hotel reservation, cruise ticket, international car insurance or other document showing location and approximate date of travel or time-sensitive need for a passport.
  • Copy of letter from State denying their passport application or revoking their passport. State has sole authority to issue, limit, deny or revoke a passport.
The IRS may ask State 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 State to revoke a passport if the taxpayer could use offshore activities or interests to resolve their debt but chooses not to.

Before contacting State about revoking a taxpayer’s passport, the IRS will send Letter 6152, Notice of Intent to Request U.S. Department of State Revoke Your Passport, to the taxpayer to let them know  what the IRS intends to do and give them another opportunity to resolve their debts.

Taxpayers must call the IRS within 30 days from the date of the letter. Generally, the IRS will not recommend revoking a taxpayer’s passport if the taxpayer is making a good-faith attempt to resolve their tax debts.

Ways to Resolve Tax Issues

There are several ways taxpayers can avoid having the IRS notify State of their seriously delinquent tax debt. They include the following:
  • Paying the tax debt in full,
  • Paying the tax debt timely under an approved installment agreement,
  • Paying the tax debt timely under an accepted offer in compromise,
  • Paying the tax debt timely under the terms of a settlement agreement with the Department of Justice,
  • Having a pending collection due process appeal with a levy, or
  • Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief. 
Once You’ve Resolved Your Tax Problem With The IRS,

The IRS Will Reverse The Certification Within 30 Days Of Resolution Of The Issue And Provide Notification To The State Department As Soon As Practicable.



If you’re leaving in a few days for international travel, need to resolve passport issues and have a pending application for a U.S. passport, you should call 888 8TaxAid immediately. If you already have a U.S. passport, you can use your passport until you’re notified by the State Department that it has been revoked. 
If your passport is cancelled or revoked, after you’re certified, you must resolve the tax debt by paying the debt in full, making alternative payment arrangements or showing that the certification is erroneous.
The IRS will reverse your certification within 30 days of the date the tax debt is resolved and provide notification to the State Department as soon as practicable.
If You Face This Problem, You Should Consult with Experienced Tax Attorneys, As There Are Several Ways Taxpayers Can Avoid Having the IRS Request That the State Department Revoke Your Passport. 
  Want To Keep Your US Passport?

Contact the Tax Lawyers at 
Marini & Associates, P.A.
for a FREE Tax Consultation Contact us at:
Toll Free at 888-8TaxAid (888)882-9243.