Terry Ritchie tweeted this earlier today. It tends to confirm fears about information sharing between agencies and how it may complicate things at the border. It would appear this exchange will happen only if an actual tax lien has been filed; I would suspect this won’t apply to the majority of us.
The IRS has established procedures to facilitate tax collection from taxpayers who live outside the United States. If a taxpayer has an unpaid tax liability and is subject to a resulting Notice of Federal Tax Lien, the IRS may submit identifying taxpayer information to the Treasury Enforcement Communications System (TECS), a database maintained by the Department of Homeland Security (DHS). The database allows the DHS to identify taxpayers with unpaid tax assessments who are traveling to the United States for business, employment, or personal reasons (Internal Revenue Manual (IRM) §126.96.36.199). As a result, taxpayers traveling to the United States with unpaid tax assessments increasingly are being detained at the border.
Again, the expectable swerve around any possible privacy issues:
Information reflected in a Notice of Federal Tax Lien, which may be entered onto TECS, includes the contact information for the individual and the amount of the unpaid tax. Taxpayer information may not be disclosed to TECS without a properly filed federal tax lien because Sec. 6103 protects taxpayers from improper disclosures of their tax return information. As a general rule, returns and tax return information are confidential and may not be disclosed to federal or state employees or agencies unless expressly allowed by statute.
Sec. 6103 does not specifically authorize the disclosure of return information that already is part of the public record. However, the U.S. Supreme Court ruled in a line of cases that there is no reasonable expectation of privacy for matters that are part of the public record. See Nixon v. Warner Communications, Inc., 435 U.S. 589 (1978); Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975); and Craig v. Harney, 331 U.S. 367 (1947). Consequently, the IRS takes the position that the disclosure of information taken from the public record is not an unauthorized disclosure under Sec. 6103. Under this position, information reflected in a properly filed Notice of Federal Tax Lien is part of the public record and may be submitted to TECS without violating the disclosure laws.
Observations by the editor, Annette Smith:
IRS disclosure of taxpayer return information to the DHS through TECS can have broad consequences. The IRS relies on the general proposition that taxpayer return information that is part of the public record is not subject to disclosure limitations. A withdrawal or release of the lien, and certain other prerequisites, are required for removal of the taxpayer’s information from TECS (IRM §188.8.131.52.5.4). Thus, the lengthy process to remove information from TECS may result in detention at the border for travelers to the United States for a period of time after the lien has been released or withdrawn.
A taxpayer who resides outside the United States may not be aware of outstanding federal tax liabilities if the address on record for the taxpayer is outdated or otherwise incorrect. Consequently, tax advisers with clients who reside outside the United States should ensure that the correct address for the taxpayer is used on the client’s returns and, if the client no longer is required to file U.S. returns, that the IRS still is able to contact the taxpayer about previously filed returns. Taxpayers should be advised that the failure to keep the IRS apprised of a change in mailing address may result in an unwelcome, and potentially embarrassing, surprise from the DHS when the taxpayer seeks to enter the United States through Immigration and Customs Enforcement.
Having just read swisspinoy’s post Day One: Filing Previous Year Tax Returns with all the confusion about addresses, I shudder to think of how likely it is, that information sharing between agencies will turn into a huge disaster.
Homeland Security May Contact U.S. Persons Living Abroad Who Owe Back Taxes
@all- I guess what it comes down to is whether or not you have any assets in the U.S. that they can put a lien on or take in compensation for your tax liabilities. Of course it also means that you can’t go across the border. Of course the U.S. has played that tune before with the Vietnam draft dodgers. I guess that the pardon that was given to them was not because the country was ashamed of what had been done but because one man, President Jimmy Carter, was ashamed.
Maybe shame and conscience is something that is beyond the ability of the individual to possess once he has become part of an impersonal organisation?
Even if we were to phone in to the IRS and ask if they have a lien against us, they may say, “No, but should we?” I can’t think of a better excuse for them to get out your long forgotten IRS paperwork in order to squeeze out some menial back tax but assess a large penalty for non-compliance.
@schubert & Petros
Notwithstanding the lien issue, I think we can count on confusion and further irritation if any expat tries to cross the border.
@Noble, That’s exactly right. Eventually, I believe that Obama will be re-elected and that he will enact policies that makes it a condition that those deemed to be US citizens abroad will have to prove that they have filed their taxes and FBARs when they try to enter into the United States. If they refuse to offer forms, they will start with detention, so that you miss flights and are inconvenienced. Then they will escalate it to more drastic forms of arresting people on trumped up grounds.
recalcitrant – The Carter pardon. By late 1976 outstanding indictments for draft offense had been pared down to around 2700, down from around 4500 in January 1975. Cases were being tossed out right and left. What Carter did, ultimately, was to extricate the United States from the evident shame of having a vocal and visible wad of indisputable exiles parked right next door. New American exiles are in the making. There are already people who will not cross that border, and some of them have said so on Brock. These new exiles will never become embarrassing until and if they coalesce into a visible and identifiable network of local groups, and that doesn’t seem likely to happen. PS Carter’s no-action-required pardon did not apply to deserters.
@Petros- now wouldn’t arresting and detaining people just be the most foolish thing in thw world to do? But then Congress and the President are very good at doing foolish things. The U.S. doesn’t have enough detention facilities as it is and arresting and housing non-residents, who don’t use any government services, would be just the thing that the U.S. debt needs.
This is would be just one more example of why politicians should not be put in charge of the nation’s economy. It would make just about as much sense as the ethonal program which actually consumes more energy that it produces, but is a great subsidy to the corn farmer and therefore a sure vote getter for the politician.
@petros and undetected US persons (those with no outward signs of Americanism) skate through the border and ‘foreign’ banking systems.
@all- I don’t know how many of you are familiar with the work of Jacques Ellul, a French philosopher/theologian of the 70’s, but I recall reading a passage on the ingredients of totalitarian states from one of his books. And one of the ingredients that he said was fundamental to the establishment of a totalitarian state was the establishment of a national police force such as the RCMP.
At the time when Mr. Ellul wrote this book he pointed out that the U.S. was the only Western country without a national police force. I guess that this is no longer true now that the U.S. has the Department of Homeland Security.
Haha, one more reason to never go to the US again.
recalcitrantexpat – Many countries have national
police forces. Most of them that I am familiar with are nowhere near as
totalitarian as the US is. Technically the US has the FBI and CIA…. I still
think it’s about “how you use” the weapon or tool that is most important.
I had a dream the other night that the US starting
denying US Persons the right to move to other countries. Chuck Schumer appeared
on TV stating that people can’t leave because they have to repay the government
for everything they have been given, like an indentured servant from birth. I
really fear that we’ll all live to see the day where this actually happens. For
those of you with a CLN, you should be able to sleep better at night.
*@geez, Brazil has its Federal Police. Several years back with a Brazilian co-worker we pulled up in front of the Telebras building in Brasilia in a taxi.That was the government-owned holding company that controlled all of Brazil’s telephone companies. Their building was right next door to the Federal Police headquarters and they shared a common area for cars and taxis to stop and let out passengers. I failed to look as I should of, so when I opened the rear door of the the taxi, it caught and tore of the side view mirror of a car that was passing by. The driver was naturally not happy and came over with anger on his face. I immediately offered to pay for the damage since it was my fault. Suddenly he smiled and repoied “nao ha problema (no problem) jumped in his car a sped away. I was mystified.
My Brazilian friend smiled and told me that since this had happened at fhe front door of the Federal Police building, he had probably detected my American accent and assumed I was with the CIA on some sort of an official mission. He did not want to risk getting involved with either the Federal Police or the CIA so he got out of there as quickly as possible.
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