Tuesday, September 16, 2014

IRS Debtor’s Prison Closer to Becoming a Reality

April 10, 2012 by  
Filed under Business, News

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Senator Barbara Boxer (D – Los Angeles) is closer to realizing her goal of passing a bill that could lead to the creation of a debtor’s prison for people who owe the IRS taxes.   Senate Bill 1813, which Boxer authorized and is now heavily pushing for passage in the House,  has the potential to allow the U.S. federal government to prevent anyone owing any amount of  back taxes from traveling outside the U.S, by revoking his or her passport.

SB 1813 was introduced in November of last year by  Boxer to “reauthorize Federal-aid highway and highway safety construction programs, and for other purposes.

While the main thrust of SB 1813 is to authorize appropriations for federal transportation and infrastructure programs, the “Moving Ahead for Progress in the 21st Century Act” or “MAP-21″ includes a provision that would allow for the “revocation or denial” of a passport for persons with “certain unpaid taxes” or “tax delinquencies”.

Section 40304 of SB 1813 provides that any individual owing more than $50,000 to the Internal Revenue Service may be subject to “action with respect to denial, revocation, or limitation of a passport”.  The bill allows exceptions in the event of emergency or humanitarian situations or limited return travel to the U.S., or in cases when any tax debt is currently being repaid in a “timely manner” or when collection efforts have been suspended.

The bill does not appear to take into account that taxes and the cost of living are soaring while income is decreasing, thereby increasing the likelihood that the poor and middle-class could over a period of years come to owe upwards of $50,000 fairly easily in this recessionary economy.

There appears to be no provision requiring a taxpayer to be charged with tax evasion or any other crime in order to have their passport revoked or limited, which means that wealthy tax evaders will likely not be affected.

The bill also neglects the matter of tax evasion by large businesses earning income in the U.S., redefining  it and then off-shoring the funds, thereby denying the U.S. of the money the IRS now attempts to collect from the poor and atrophying middle-class.

Boxer vowed last week to push House Republicans to pass the bipartisan transportation bill that would keep the Highway Trust Fund from going bankrupt.

“Thousands of businesses are at stake, and eventually we are talking about nearly three million jobs at stake,” she said in a statement. “There are many people on both sides of the aisle in the Senate who want to get our bill, MAP-21, passed into law, and I am going to do everything I can to keep the pressure on the Republican House to do just that.”