San Diego, CA

The IRS has a method of ‘last resort' to collect overdue taxes: Revoking your passport

Published

13 mins ago

August 25, 2024

Press Room

The IRS has a method of ‘last resort' to collect overdue taxes: Revoking your passport

By law, the IRS must notify the State Department if an individual’s federal tax debt is “seriously delinquent.”
This is a large federal tax debt — of more than $62,000 in 2024 — that the taxpayer has repeatedly ignored.
If taxpayers don’t remedy their overdue bill, the government will generally deny their passport application and can revoke or limit their active passport.

Travelers, be warned: The federal government may revoke your passport if you ignore a big tax bill.

Such punishments have become more frequent in recent years, experts said.

Federal law requires the IRS and Treasury Department to notify the State Department if an American has a “seriously delinquent tax debt.”

This is a large federal debt — of more than $62,000 in 2024 — that the taxpayer has repeatedly ignored.

The debt threshold includes aggregate total federal tax liabilities, plus penalties and interest, levied against an individual. It’s adjusted annually for inflation.

The State Department generally won’t issue a new passport and may revoke or limit an existing one in cases of serious delinquency, according to the IRS.

The government typically uses this enforcement mechanism — which has been in place since 2018 — as a sort of last-ditch effort to collect unpaid tax levies, experts said.

Should those debts remain unpaid, the potential consequences are ample: Travelers might not be able to take trips overseas until they’ve resolved their debt. Expats and those who travel abroad for business may have to return to U.S. soil indefinitely until their tax case concludes, for example, experts said.

Revoking a passport is “a step of last resort,” said Troy Lewis, a certified public accountant based in Draper, Utah, and an accounting and tax professor at Brigham Young University.

“How do you get rich folks’ attention regarding paying their taxes? Just make sure they can’t summer in Europe,” he said.

‘It gets people to call the IRS’

Demand to travel abroad has surged as the Covid-19 pandemic has waned. Americans applied for about 21.6 million U.S. passports in fiscal 2023 — a record number, according to the State Department.

Todd Whalen, a CPA based in Denver, has seen tax enforcement efforts involving passports ramp up over the past three years.

“This is becoming more and more of a big deal,” said Whalen, founder of Advanced Tax Solutions, which helps consumers and businesses resolve tax debts. “We’ve gotten several [cases] this year.”

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In one instance, a client only found out his passport had been revoked while at the airport trying to fly to Mexico for a trip to celebrate his son’s high school graduation.

“It works,” Whalen said of the collection effort. “It gets people to call [the IRS].”

A State Department spokesperson declined to provide annual statistics on how many taxpayers had their passports revoked or denied. The IRS didn’t comment by press time.

All other collections must have been ‘exhausted’

J. David Ake | Getty Images News | Getty Images

It can be “quite easy” for overdue tax debts to exceed the $62,000 threshold, according to Virginia La Torre Jeker, an attorney who specializes in U.S. international tax law.

Americans living abroad, for example, may have “significant penalties” for not filing various foreign information returns, she said in an email.

Debts can also include any tax levies owed by individuals, she added. Those may be business taxes for which the taxpayer is personally liable or trust fund recovery penalties, she said. (The latter relate to withheld income and employment taxes like Social Security taxes or railroad retirement taxes.)

However, revoking a passport isn’t generally the government’s first way to collect such overdue debts, experts said.

The IRS must have already “exhausted” all other typical collection activities, said Lewis, owner of Lewis & Associates, CPAs.

Generally, that would mean the taxpayer hasn’t responded to prior IRS notices of a federal tax lien, for example. (A lien is the government’s legal claim to a debtor’s assets like real estate and other personal property. It isn’t a move to collect said property, though.)

Various courts have upheld the federal government’s ability to revoke passports in order to collect tax debts as constitutional, Lewis said.

He pointed to two recent cases as examples: Franklin v. United States in the U.S. Court of Appeals for the 5th Circuit and Maehr v. United States Department of State in the U.S. Court of Appeals for the 10th Circuit.

In the former, the defendant, James Franklin, owed about $422,000 in taxes for failing to file accurate tax returns and report a foreign trust of which he was the beneficial owner. The IRS ultimately filed a tax lien and levied his Social Security benefits, and the State Department later revoked his passport.

“It seems pretty well established this is something [the government] can do,” Lewis said.

Travelers have remedies available

The State Department doesn’t revoke a passport straight away. When the IRS certifies debt as seriously delinquent and alerts the State Department of that, it will mail the taxpayer a notice — CP508C — outlining the potential implications of that classification.

If an individual then applies for a passport, the State Department would generally deny and close that application if the person doesn’t make efforts to pay their debts. Such efforts might include paying the balance in full, entering into a payment plan or making a compromise agreement with the IRS.

The debtor would still be able to use an active passport, if they have one, unless notified in writing by the State Department that their passport had been revoked or limited, the IRS said.

“IRS looks at various factors, including taxpayer noncompliance in the past and taxpayer failure to cooperate with the IRS” when opting to revoke a passport, according to La Torre Jeker.

The State Department can limit the passport’s use only to return travel to the U.S., thereby preventing the person “from being trapped in limbo” if outside the country, she said.

The IRS sends taxpayers Letter 6152 before revocation, asking them to call the IRS within 30 days in order to resolve their account and avoid passport cancellation, she added.

Still, sometimes passport denial catches debtors by surprise when they travel, said Whalen at Advanced Tax Solutions.

For example, the IRS may have the wrong address on file — especially if a taxpayer has moved — and mail notices to the wrong place, Whalen said.

“A lot of times, they don’t know they have a balance due until they … show up at the airport,” he said.

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San Diego, CA

William Bill Wade Spore, M.D.

Published

7 hours ago

August 25, 2024

Press Room

William Bill Wade Spore, M.D.

OBITUARY

Born in upstate New York in 1935, Bill passed away following surgical complications on August 12, 2024. In 1943, his family moved to San Diego. He attended Jefferson grammar school, Roosevelt Jr. High and graduated from San Diego High in 1952 where he was Junior Class President and ASB Veep. Bill earned a bachelor’s degree from UC Berkeley in 1957 and his medical degree from Stanford University School of Medicine in 1961. Following a one-year internship at Los Angeles County Harbor General Hospital, he served three years as a general medical officer in the United States Navy. After a year of private general practice in San Diego he returned to L.A. County Harbor Hospital for a residency in Obstetrics and Gynecology. The remainder of his professional life was spent in San Diego as a Kaiser Permanente physician.An avid sportsman and physical fitness advocate, Bill lettered four years on both the Cal swimming and water polo teams, co-captaining both teams as a senior. He was president of Beta Theta Pi fraternity and belonged to several campus honor societies. He played slo-pitch softball in the Point Loma Senior League for twenty-five years, jogged daily on the soft sand in Mission Beach until his hips finally wore out, then returned to swimming for general conditioning. In 2015 he swam the Catalina Channel with a relay team of eighty-year-old men, setting an international record. Bill began skiing at age six. At sixty-two he switched to snowboarding for the next twenty years. He began surfing at age forty, following that passion until the age of eighty-two having surfed numerous California, Hawaiian and Baja surf sites, Jeffreys Bay, South Africa, and Byron Bay, Australia. Upon retirement from medicine, Bill took up cycling, touring on bicycle much of the United States, parts of Europe and most of California with his beloved “Cyclo-Path” fellow riders.Above all, spending time with his family mattered most. For eighteen memorable Easter vacations, he took his family on camping trips, setting up on the sands of Guaymas, Mexico. For twenty-seven years he took countless ski trips with family and friends to June Lake, California, staying in the cabin he built with his brother-in-law and several friends.Bill is survived by Grace, his wife of sixty-six years, his three sons, Eric, Brock, Dain, his daughter, Ingrid, their spouses, seven grandchildren, and his sister, Adrienne. He was preceded in death by his daughter, Lorraine Anne. His ashes will be interred next to hers following funeral services at All Souls Episcopal Church on September 5th.Most of all, “Dr. Bill” would like to be remembered as a loving, caring, and devoted husband, father and grandfather.

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San Diego, CA

Robert Logan II sworn in as San Diego Fire-Rescue Chief

Published

15 hours ago

August 24, 2024

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Robert Logan II sworn in as San Diego Fire-Rescue Chief

SAN DIEGO (KGTV) — The city of San Diego and Mayor Todd Gloria swore in their new fire-rescue chief Saturday morning in front of a packed house at a church in South Encanto.

The city has a new chief, but he’s not new to the area or to the fire-rescue department.

“I grew up in this community, and there was a time in my life when we struggled, and all I wanted was a full meal,” said new Chief Robert Logan II. “And now I’m the fire chief of the second-largest city’s fire department. It’s simply amazing.”

Logan, who grew up in the Lincoln Park neighborhood of San Diego, is now the city’s 19th fire-rescue chief. He replaces Colin Stowell, who is retiring.

Logan climbed the ranks, starting as an emergency medical technician in 1999 before becoming a firefighter a year later. Before Saturday, Logan served as the deputy fire chief. The city council approved his appointment last month, and now he’s sworn in as chief in the city he grew up in.

Logan said he was raised by his late grandmother, just a few houses down from a fire station. He said this is the job he’s always wanted, and one his grandmother knew he could achieve.

“She would cry (today), and she would tell me that she always knew. She always believed in me, even when I didn’t believe in myself,” Logan said with tears in his eyes.

Gloria said Logan’s experience, love for the city, and ability to overcome odds made him the right person for the job.

“(This is) a man who’s experienced adversity, a man who persevered, a man who was a child in this community, but is now going to be a role model for children in this community,” Gloria said during the swearing-in ceremony.

Logan is San Diego’s third African-American fire-rescue chief, but the first since 2002.

“What I hope you see in me as the 19th fire chief of America’s Finest City are my grandmother’s values of integrity, an unbreakable work ethic, and a love for all people,” Logan said.

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San Diego, CA

La Jolla High opens season with rivalry win over Bishop’s; Country Day romps

Published

22 hours ago

August 24, 2024

Press Room

La Jolla High opens season with rivalry win over Bishop’s; Country Day romps

Last year’s “Battle for Pearl Street” was a one-sided affair, with La Jolla High School walloping The Bishop’s School 41-19.

Flash forward a year and the 2024 edition of the in-town rivalry had a similar result.

La Jolla came away with a 38-21 win at home Aug. 23 in the season opener for both teams as the Vikings seek a return trip to the CIF San Diego Section finals. Last season they lost the Division II championship game to Del Norte.

Meanwhile, the 2023 Division III champion La Jolla Country Day School Torreys got off to a fast start in 2024, routing Chula Vista at home 35-6.

Football is back as La Jolla teams try for repeat of last season’s success

La Jolla coach Tyler Roach was pleased with how the season opener went for his team.

“Anytime you can beat a rival, a crosstown one at that, it’s great, especially the first game of the season, to get this thing started off on the right track,” he said.

The offenses commanded the game early, with both conducting two-play scoring drives in their opening possessions.

The Bishop’s Knights, last year’s Coastal League champions, scored on a 12-yard touchdown pass from quarterback Cash Herrera to Ryan Landa. But that was soon answered by a 39-yard TD pass from La Jolla QB Hudson Smith to Hank Hansen.

Herrera, who missed last year’s game against La Jolla due to an injury, made his presence felt early and often. The junior was on point in the first half, connecting on three touchdown passes.

Fortunately for La Jolla, first-year starter Smith threw for three first-half TDs himself.

Smith and wide receiver Andre McLees Walker connected for a pair of first-half touchdowns that helped put La Jolla up 24-21 at halftime.

“What I saw from Hudson did not surprise me one bit,” Roach said. “He has been waiting for this moment for a long time. He waited in the wings last season [behind now-graduated Jackson Diehl] and was locked in tonight.”

“For Andre, he is a super-talented kid,” Roach added. “One of our starting wideouts had been sick all week and I didn’t know until 4 o’clock that he wasn’t going to play. So around 4:30, I told Andre [who also plays cornerback on defense] he would have to rock in both ways, and he stepped up big time.”

Though the offenses dominated the first half, ultimately the La Jolla defense — more specifically the secondary — turned the tide.

On the Knights’ second possession of the second half, safety Ryan Kestler jumped in front of a Herrera pass for an interception, setting up an eventual 1-yard scoring run by Smith.

One possession later, safety Carson Diehl, who led the La Jolla defense in interceptions last season, picked off another Herrera pass.

The Vikings forced four turnovers in all and shut out the Knights in the second half.

La Jolla Country Day 35, Chula Vista 6

The Torreys held Chula Vista senior quarterback Izaac Baca to 10 pass completions in 27 attempts for 83 yards and an interception and limited the Spartans to 52 yards rushing.