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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 re

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 just unjustly empowers the government.

duxup 8y ago
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 remember from he letters provided by the IRS, if I'm responding with legit responses (I sent them the not correct paperwork a few times and they were still ok with that) they consider the matter in one phase, but if I'm not it goes to another phase. It would make sense (hopefully the law does) that provided I'm responding and the IRS is cool with my responses that I'm not subject to the law.... but if I'm not responding then maybe the law takes effect?
- refurb 8y ago
  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.
  - ta1234567890 8y ago
    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.
nradov 8y ago
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.
throwaway2016a 8y ago
Anecdotally, the two times I have had this happen it went... 1. Me, calls IRS: "Hey, this is wrong because ..." 2. IRS: "Ok, fill out this form and send it in" 3. Me: Fills out form and sends it in 4. IRS: Provides me a document saying I am all set Probably about 3-4 weeks all said and done. I was actually impressed with how painless it was and how friendly the people were. An audit is a different story.
TheCoelacanth 8y ago
It seems like you would have to go far beyond that stage without settling the tax bill before you would be at risk of having a passport application denied. > To be at risk of passport denial, a taxpayer must typically be subject to a lien, which advises creditors of a debt to the IRS, or a levy, which gives the IRS the authority to seize assets. > Taxpayers typically aren’t subject to passport restrictions if they’re contesting an assessment administratively or in court, or if they have pending or current installment-payment agreements or offers-in-compromise with the IRS.

duxup 8y ago

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 remember from he letters provided by the IRS, if I'm responding with legit responses (I sent them the not correct paperwork a few times and they were still ok with that) they consider the matter in one phase, but if I'm not it goes to another phase. It would make sense (hopefully the law does) that provided I'm responding and the IRS is cool with my responses that I'm not subject to the law.... but if I'm not responding then maybe the law takes effect?

refurb 8y ago
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.
- ta1234567890 8y ago
  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.

nradov 8y ago

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.

throwaway2016a 8y ago

Anecdotally, the two times I have had this happen it went... 1. Me, calls IRS: "Hey, this is wrong because ..." 2. IRS: "Ok, fill out this form and send it in" 3. Me: Fills out form and sends it in 4. IRS: Provides me a document saying I am all set Probably about 3-4 weeks all said and done. I was actually impressed with how painless it was and how friendly the people were. An audit is a different story.

TheCoelacanth 8y ago

It seems like you would have to go far beyond that stage without settling the tax bill before you would be at risk of having a passport application denied. > To be at risk of passport denial, a taxpayer must typically be subject to a lien, which advises creditors of a debt to the IRS, or a levy, which gives the IRS the authority to seize assets. > Taxpayers typically aren’t subject to passport restrictions if they’re contesting an assessment administratively or in court, or if they have pending or current installment-payment agreements or offers-in-compromise with the IRS.