by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The U.S. government is building the world’s largest debtors’ prison: the United States.
Beginning this month, the Internal Revenue Service will begin denying passports to some American citizens with unpaid taxes and, in some cases, revoking the passports of Americans with tax delinquencies. The government will in effect place those with unpaid taxes under arrest, effectively denying them their right to travel.
To be clear: We are not talking about Americans who have been convicted of tax evasion or tax fraud, or who are awaiting a criminal trial on charges related to tax matters. These Americans have not been charged with a crime, must less convicted of one. They simply have unpaid taxes amounting to $50,000 or more.
More precisely: They have an unpaid IRS liability amounting to $50,000 or more. The IRS’s aggressive schedule of interest and penalties for unpaid taxes ensures that a relatively small amount of unpaid taxes can turn into a $50,000-plus liability with remarkable speed.
The IRS has remarkable investigative tools and collections procedures at its disposal. Say what you will about the Patriot Act, it does not oblige Americans to file detailed paperwork annually with the Department of Homeland Security detailing their personal affairs, business arrangements, housing situation, health-insurance coverage, etc. The IRS has that power, and then some: It can seize assets, garnish wages, put liens on property, and more. Still, there are occasions when it finds itself unable to collect a debt. Sometimes, that is because it is dealing with a crafty person who manages to hide his income and property from the government. More often, that is because it is dealing with a person who simply cannot pay.