Image of Home Logo

Related Resources

Tax & Advisory Services

Feds Gain Enhanced Ability to Collect Delinquent Taxes

Saul Brenner, CPA, J.D., LL.M. 12.28.2015 | eVisor

As part of the highway funding bill, signed by President Obama on December 4, the IRS gets two more ways to go after delinquent taxes - via passport denial and through contracts with private debt collectors.

Passport Denial: Under current law, the State Department can refuse to issue or renew a passport to applicants owing child support in excess of $2,500 or for certain types of federal debts.  Now, the Department can deny a passport or a renewal and even revoke an existing passport if the individual is certified by the IRS as having seriously delinquent tax debt.  This delinquency would be any outstanding debt assessed in excess of $50,000 (adjusted for inflation), for which a notice of lien under §6323 has been filed and the administrative rights under §6320 with respect to such filing have been exhausted or have lapsed, or a levy is made pursuant to §6331. There are exceptions for humanitarian or emergency reasons.

Private Collectors: The Bill requires the IRS to enter into qualified tax collection contracts with private debt collectors for the collection of inactive tax receivables.  These receivables are defined as those:

  • removed from the active inventory for lack of resources or inability to locate the taxpayer;
  • for which more than 1/3 of the applicable limitations period has lapsed and no IRS employee has been assigned to collect the receivable; or
  • for which a receivable has been assigned for collection but more than 365 days have passed without interaction with the taxpayer or a third party for collection.

Questions? Contact your Berdon advisor or Saul Brenner, CPA, J.D., LL.M.  at 212.331.7630 | sbrenner@berdonllp.com 

Tax & Advisory Services LEAD ADVISORS View All