This posting is dedicated to Meunier.
Caveat: only a lawyer can or should attempt to read written law. (You can pay lawyers, and pay them exorbitantly — with no guarantees that they can read the stuff either.)
Even so, an extraterritorial U.S. person who holds only a U.S. passport may want to take a glance at the recent passport-related legislation glommed into the FAST Act.
The Fixing America’s Surface Transportation Act can be found at
https://www.congress.gov/114/bills/hr22/BILLS-114hr22enr.pdf
On pages 418-422 is found
Title XXXII–OFFSETS
Subtitle A–Tax Provisions
which adds to Internal Revenue Code “the following new section:”
SEC. 7345. REVOCATION OR DENIAL OF PASSPORT IN CASE OF
CERTAIN TAX DELINQUENCIES.
The not-comforting language in these five pages includes this zinger:
The taxpayer may bring a civil action against the United States in a district court of the United States or the Tax Court to determine whether the certification was erroneous or whether the Commissioner has failed to reverse the certification.
This seems to translate as — “You think the U.S. has made a mistake? O.K. Up to you and your lawyer to sue the United States. And good luck to you.”
The tired cliché “Timing is everything” may liven up with entirely new meanings for a person who finds themselves assessed and then either has notice of lien filed against them with “administrative rights” OR faces levy “pursuant to section 6331.”
So what is that bit after the little word “or”? It seems to be this:
26 U.S. Code § 6331 – Levy and distraint
https://www.law.cornell.edu/uscode/text/26/6331
This section starts off with some viciously tight timelining:
If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property …
Apart from the clear presence of time windows whose business is inexorable closure (whatever the specified periods may amount to in the only-for-lawyers details), some more accessible news (p. 421-422) falls under the heading
WITHOUT SOCIAL SECURITY ACCOUNT NUMBER
and provides for the denial of passport to anyone (i) not providing a number, or (ii) providing “an incorrect or invalid social security number willfully, intentionally, negligently, or recklessly.”
That memorable string of adverbs should cover just about anything?
When all is said and done, though, only a lawyer can or should attempt to read written law.
But sometimes curiosity leads into doing scary things. Especially scary for the extraterritorial U.S. person without alternative passport.
Yours truly, a fearless explorer, a survivor of many shipwrecks — never through airlift because neither a bird (condor, ostrich, whatever) nor a U.S. person who can count on that famous benefit of worldwide extraction from dire situations.
Oops, forgot, ostriches can’t fly anyway. Still, they are feathered bipeds. Feathered without tar, by the way.
@Socrates, “the die is cast.”
I did some more reading and can see clearly a pre-FAST lien is not applicable. Why? A person may have exercised their rights differently if this additional “penalty” was applicable.
Passport denial is a form of penalty. Can a new monetary penalty be imposed retroactive on an old lien? No.
In theory if somehow possible, Treasury would need to remove a lien and then start from scratch on reimposing a fresh lien to take into consideration FAST. Can or would they do it? Doubtful
One thing, this provision is very ripe for tinkering by the likes of allies of former Sen Carl Levin.
Tinkering they’re slip in a provision in some other 2500 page legislation (which nobody will read) and for example scrap the $50,000 to zero allowing the IRS to revoke someone’s passport for $1.
Like the US dollar, the US passport increasingly has more terms and conditions attached to its use.
Watch if other countries suddenly get an influx of Americans apply for second citizenship they’ll end up pushing up their fees as well.
@George “Treasury COULD create a system whereby State has access to the massive taxpayer database BUT can only querry the above two items allowed by Statute.” Yes, that’s what I think too. So we agree on that.
@George “I did some more reading and can see clearly a pre-FAST lien is not applicable”. Yup, we agree on this one too. So if IRS follows Congress’s intent (which actually happens some of the time) then existing tax debts are not applicable to the new law. This hasn’t stopped the whole compliance industrial complex painting the news with “settle with the IRS now or you can’t travel”. Ironically, those with tax debts now should not have a problem it’s the poor slobs who have a tax debt in a year or so who are going to get it.
As to Levin and his cronies tinkering with it, sure but at least that’s a few years away as this whole thing plays out.
@Socrates…..think where the Statute has the “shall” versus “may” language.
I wonder if expats needing their sole US Passport should maybe renew early so they have the full ten years? If you expire in the next couple years it may make sense to renew now before further tinkering, that way you have the full ten years. I think State will be loathe to revoking existing passports of expats as they are not bound to do same.
Yes, the compliance industry and some of the compliance industry pundits have gone way overboard but as they say its…marketing.
Cheers
@Socrates, yes its clear that in a couple years Congress will find another revenue measure and that will be to close the “loophole on pre-FAST liens.”
They will come up with a process that the Secretary removes the old lien and files a fresh lien to grab that old money.
If Eritrea can do it, so can jealous America.
@George
“Passport denial is a form of penalty.”
Not to the vast majority of Americans who don’t see the value in having a US passport. For them, this law is really more of a deterrent. It’s only punishment for those who rely solely on their US passports, which until the US closes its border to its citizens who don’t carry a US passport, only really affects those who don’t have another nationality. Until the US starts enforcing its own laws and denies USC’s the ability to enter and exit the US on another passport, there will be workarounds, as many Americans are entitled to other citizenships.
Unless I’m way off in my line of reasoning, you have to wonder how good of a revenue raiser denying someone a US passport will really be.
Treasury and State computers may have different operating systems, software versions, requirements, regulations, etc.
It is likely that as a short term solution, the easiest way to provide State access to the required IRS information would be to install a special IRS sanctioned computer at each embassy. As one commenter said, the state department employees had to become IRS employees too. This would likely be required to provide them automatic PKI/LDAP access to the database, possibly by thumbprint or other Biometrics or over ID card. Once they have been added to IRS’s LDAP database, then they could be assigned a special database role or profile that would be programmed to restrict access to the required data subset. I would guess that if they are installing hardware already then the entire use-case had already been analyzed and required hardware and software contracts awarded. This would probably take at least a year for 2 inefficient Fed-gov departments to accomplish.
As far as hitting the $50,000 IRS Passport jackpot goes, what happens to some poor Accidental American who shows up at passport control in a US airport and the IRS database says the poor slave has never filed US taxes? What is this slave’s liability at that precise point in time? is it zero or infinity? we know what the IRS will say, and are they really going to allow that tax cheating slave to exit the country? So if state or DHS sends in a SS number, or even a finger print or other bio-metric scan, and no income tax form has been found, the chances are this slave will not be allowed to leave the plantation, even for a few days.
It is also important to note that the CISA bill, passed as part of the omnibus spending bill, authorizes extended data sharing between departments. How long before they find away to nail delinquent dads, uninsured Obamacare hideouts, and delinquent student debt-slaves?
@ConfederateH
What then happens when someone with a US passport shows up with no SSN on their passport? My US taxes are up to date but I renewed my passport before I was assigned a SSN.
“Also, from my reading of the statute and conference report, if you have an existing tax debt (incurred before Jan 1 2016 or before they start enforcing the new passport law), then you are in the clear and should not have your passport cancelled/revoked. Why? Because IRS is required to say in the original Notice of Levy/Lien that you are subject to the passport revocation.”
Then they’ll just issue another Notice of Levy/Lien, which will say that you are subject to the passport revocation.
Though they won’t send it to your last known address, and their return address will end in the international standard country code for Panama (PA), so your country’s post office will return the undeliverable mail to Panama.
‘What is definition of “tax debt?” Does that include interest, penalties, FBAR penalties?’
Usually it includes interest and alleged penalties, but it cannot include FBAR penalties because tax debt is in Title 26 USC (tax) but FBAR is in Title 31.
‘I would guess that State will be very hesitant to revoke passports of anyone overseas’
They did it to Bobby Fischer because he played chess in the wrong country at the wrong time. They didn’t even notify him, so he was arrested in outbound immigration control in Japan when he thought he was just going to go on a vacation.
“the master database file has been subject to abuse by employees taking looks at neighbors and celebrities”
And by employees committing identity theft, embezzlement, and framing victims for the employees’ frauds.
“State is giving itself big problems for its embassy personnel if it starts getting into the business of making Americans effectively stateless”
No it isn’t. State didn’t give itself big problems for its embassy personnel when it made Bobby Fischer effectively stateless. If Iceland hadn’t given him citizenship he would have stayed in jail in Japan.
“I think the IRS only gets 1 shot at sending the Notice of Levy, etc.”
I think theoretically that would be true in a country that has due process, for example the United States of a Parallel Universe.
In such a theoretical country, there would also be one Notice of Determination per Notice of Levy, etc., and there would also be one Tax Court case per Notice of Levy, etc.
“Can a new monetary penalty be imposed retroactive on an old lien? No.”
Wrong. Yes it can be.
I think the IRS only gets one shot at sending the Notice of Levy, etc.
Sorta like Dept of State only gets one shot at assessing for a CLN? Knee-slapper!
The guiding inhumane non-rule for all US authority: Fay ce que vouldras …
The guiding correlative regulation: Once you enter our purview, even if we are in error, you are a miscreant until we stop saying so — and what would ever interest us in doing that? (Maybe just pay us to go away — at least until the next time.)
“Once you enter our purview, even if we are in error, you are a miscreant until we stop saying so”
Even if we are in error, you are a miscreant even after we stop saying you are.
Even if we are in intentional malfeasance, you are a miscreant even after we stop saying you are.
Even if we are in violation of a court order, you are a miscreant even after we stop saying you are.
If you try to find out what makes you a miscreant, you’re a double miscreant. If you try again, you’re a triple miscreant. If you succeed in finding out, if you make the corrections we demand (such as obediently committing perjury), you’re a quadruple miscreant, and even after we stop saying you’re a miscreant, we’ll resume saying you’re a miscreant.
@Bubblebustin: I haven’t had a US pass for several years, but as I recall the only government identification number on it was the passport number. The IRS systems surely uses SS number or ITIN number to uniquely identify a tax donkey. The FBI, HUD, and other departments must have developed their systems with some other kind of ID number. Immigration would use passport ID. Many states run their databases off of drivers license numbers.
Accurate name checking is incredibly difficult, there are numerous expensive software suppliers and human/pep (politically exposed person) database suppliers (factiva) but none of them can provide accurate matches for many name types like spanish names, arabic names, etc.
So the Empire has a mess, and that is why they apparently want to switch to a mandatory SS number even though that makes SS number privacy just one more of the millions of broken promises it has made to its slaves.
The Cyber Security Act (CISA) apparently is going to solve this by allowing/forcing all federal departments to switch to SS number as the mandatory universal unique slave identification number.
I would think that by using some kind of hash function on biometric data, like thumbprint+eye color+eye distance apart would be more efficient. All this biometric technology was developed and refined in the war for “Iraqi Freedom” and the Iraqi’s surely get the warm fuzzies whenever they think about how the gestapo arm of the empire has access to all their biometrics.
However, the preponderance of existing systems already using SS number as keys would have forced them to settle on SS number. How long would it take the IRS to change all its databases and applications to focus on some new biometric hash id? Years. This is why this entire FAST/passport bill was allowed to stew in the back burner for so long: State and Treasury had to come up with some kind of a solution, some kind of short term kludge.
So now IRS and State must have designed some kind of interface to map passport number to SS number. Eventually after enough time has passed to allow procedures and systems to be developed, when BB shows up with her US passport at the passport control, they will see that she has no SS number. They will ask her for a SS number or ITIN. If she cannot provide one or the other to be used to check her IRS status, they will assume she has not filed income taxes, and they will confiscate her passport, and probably any other international ID card/passport that she would have on her person or in her luggage. And also any property of value because that would “tax money laundering”.
Then it’ll be off to the FEMA slave-reeducation camp for bubblebustin.
Thanks for outlining those possible scenarios, ConfederationH. Having an aversion to FEMA camps, until the US starts enforcing its own laws, maybe I’ll just travel in and out of the US on my Canadian passport. Problem solved?
Or, maybe I’ll just renew my US passport prematurely now that I have an SSN (just to avoid any potential problems at the gates of Mordor).
@Don wrote: “For those who have second passports available through family ancestry should use that opportunity rather than be handcuffed to a US passport.
Featured countries
Ireland (only a grandparent is needed)
UK (parent)
Germany (I believe if you can prove the paper trail, you could have a great great great and still qualify)
Italy, France (parents again I believe)”
…
“For the UK having a UK born grandparent also helps.”
The child of most European-citizen parents will have at birth that citizenship. Several countries have rather strict rules against dual nationality: the Baltic countries, Netherlands and, to a lesser extent Germany come to mind. In the contemporary world most (non-Arab, anyway) countries treat fathers and mothers equally with respect jus soli transmission of nationality.
Ironically US estate tax law treatment of alien spouses has led Germany to tolerate dual nationality for certain Americans. At least in the past it (and Austria) were responsive to Jewish applicants who claimed the benefit of Art. 116 of the Basic Law, or for that matter Law No. 1 of the Allied Kommandatura: http://www.uniset.ca/nold/all_kom.pdf
Greece traditionally attributed its nationality to persons of Greek descent, with the exception of ethnic Slavs and ethnic Turks. the Baltic countries have been happy to receive descendants of emigrants who speak the native language on condition of renouncing any other nationality.
Often it comes down to “knowing a Ruritanian when they see one”: not so different from the once British practice for offspring of a British mother born abroad, reputed to be having the child be presented to a consular officer at the age of 5 to see if s/he acted and spoke like a Brit.
Grandchildren of Swiss emigrants can, at least until the new (and less expansive) nationality law comes into force by 2017, apply for facilitated naturalisation: this takes 12-18 months.
There must be other EU/EEA countries with such provisions, but I’ve forgotten.
“Many states run their databases off of drivers license numbers.”
That reminds me, when I lived in the US, when I was 16 years old, I was legally allowed to get a state driver’s licence but wasn’t allowed to get a state identification card. Non-drivers had to wait until age 18. Retail stores accepted either kind of ID from customers writing a cheque, but the only way my cheques would be acceptable was if I got a driver’s licence.
Hmm, maybe that’s also why states refuse to issue driver’s licences to people who are present temporarily. (In contrast, Japan is perfectly willing to issue a driver’s licence to me on my temporary visa for employment. I don’t own a car and can’t remember the last time I drove, but I still keep the licence, originally obtained in exchange for my Ontario driver’s licence.)
“Having an aversion to FEMA camps, until the US starts enforcing its own laws, maybe I’ll just travel in and out of the US on my Canadian passport. Problem solved?”
Nope. Using a Canadian passport to enter or exit the US can result in relinquishing US citizenship ^_^
Especially if you do so with that intent ^_^
Since when is using another passport to enter the US a relinquishing act? The US certainly can’t revoke my US passport for using a Canadian one.
“Since when is using another passport to enter the US a relinquishing act?”
It’s been part of the INA for decades. It probably wasn’t even changed by Afroyim v. Rusk, though there was a change to the burden of proof of presumed intent when the person didn’t declare their intent.
Surely it’s been mentioned in several threads on this site.
During my renunciation interviews I figured out that I could have saved US$450 by travelling to the US and presenting my Canadian passport in order to relinquish, but I could afford the US$450 at that time and didn’t want to delay any further.
Before I took Canadian citizenship, the US consulate in Toronto gave me some documents and that was one of the warnings listed. At the time I thought it was a good idea to be a dual citizen. Of course if I’d known what was coming later, I would have relinquished US citizenship at the time of taking Canadian citizenship.
You and me also, Norman.