Click here to listen to other IRS Back Tax Help episodes.<\/a><\/p>\nKATRINA MADEWELL: <\/strong>They all have time limits, right?<\/p>\nDARRIN T. MISH: <\/strong>Basically what it is is the IRS is now going to have the authority to revoke your passport if you have what they deem to be a seriously delinquent tax problem. What fascinates me the most is, that’s a lawyer phrase, right?<\/p>\nKATRINA MADEWELL: <\/strong>Yeah.<\/p>\nDARRIN T. MISH: <\/strong>Seriously delinquent.<\/p>\nKATRINA MADEWELL: <\/strong>What are they considering as seriously delinquent?<\/p>\nDARRIN T. MISH: <\/strong>$50,000. To some people listening to this show,\u00a0they\u2019re\u00a0like, ok, 50 grand, that’s a lot of money, how could you ever end up owing 50 grand to the government.<\/p>\nKATRINA MADEWELL: <\/strong>If you listen to the show, you know that $50,000 is a very small minute amount compared to the tax issues you deal with.<\/p>\nDARRIN T. MISH: <\/strong>Typically. I do have some $25,000 cases and things like that. But when you’re considering them, a lot of these cases, half\u00a0of\u00a0the 50,000 is interest and penalties. We’re not talking about a very big tax problem in my world at all when you’re talking about $50,000.<\/p>\nKATRINA MADEWELL: <\/strong>Darrin likes to deal with the five million dollar stuff. Just kidding.<\/p>\nDARRIN T. MISH: <\/strong>I like a challenge like anybody else.<\/p>\nKATRINA MADEWELL: <\/strong>Just curious, what was the biggest tax bill you’ve ever dealt with?<\/p>\nDARRIN T. MISH: <\/strong>We should save that for the IRS train wreck of the week.<\/p>\nKATRINA MADEWELL: <\/strong>Alright, let’s save it.<\/p>\nDARRIN T. MISH: <\/strong>That’s a doozy. I’m going to write that down.<\/p>\nKATRINA MADEWELL: <\/strong>Now you\u00a0have\u00a0to stick around for the IRS train wreck of the week and we usually do that close to the end of the hour, so roughly about ten \u2018til. And those are always good stories.<\/p>\nDARRIN T. MISH: <\/strong>The\u00a0outcome in that case\u00a0is almost unbelievable. I can prove that it actually happened. Let’s just say as a teaser, it was way over a million dollars. Many many multiples over a million dollars.<\/p>\nKATRINA MADEWELL: <\/strong>Let’s just break this down for a minute for the layperson listening. Somebody like me thinking,\u00a0of\u00a0course\u00a0I don’t have\u00a0a tax\u00a0problem but if I did, I’m just\u00a0thinking\u00a0what\u00a0that\u00a0means\u00a0if you have a revoked\u00a0passport. So you’ve got plans you’ve made. Let’s say you visit family regularly in Costa Rica or wherever you’re going.<\/p>\nDARRIN T. MISH: <\/strong>What’s interesting is we don’t exactly know what it means. Let’s say you go down to Costa Rica, for those of us in Florida, it’s not really that long of a trip, a lot of people do it. I’m always shocked looking at social media at how many people go out of the country for weekends. At least down here. You’re down in Costa Rica.<\/p>\nKATRINA MADEWELL: <\/strong>Some of the flights from Florida, Darrin, they’re only like $100.<\/p>\nDARRIN T. MISH: <\/strong>I know.<\/p>\nKATRINA MADEWELL: <\/strong>It’s not that hard to leave the country over the weekend.<\/p>\nDARRIN T. MISH: <\/strong>No, I know, it just seems kind of exotic.<\/p>\nKATRINA MADEWELL: <\/strong>It does seem weird, doesn’t it?<\/p>\nDARRIN T. MISH: <\/strong>Yeah, a little bit. Especially since we live in such an incredibly awesome place. Except for in August. Not so awesome. So you’re down in another country and a lot of these countries you can clear customs and immigration in that country. Have you ever been to one of those airports? Aruba’s like that.\u00a0Kersau\u00a0and some of those countries down there, you actually clear customs down in the foreign country. I always that that would be a pretty cool gig if you were the customs guy. You probably get paid more too. To live in\u00a0Aruba\u00a0for six months at a time or something, but I keep digressing.<\/p>\nKATRINA MADEWELL: <\/strong>It’s so fun.<\/p>\nDARRIN T. MISH: <\/strong>You’re down in Costa Rica and they run your U.S. passport and it comes back as revoked. What does that mean? Are you stuck? Are you going to come back?<\/p>\nKATRINA MADEWELL: <\/strong>Well, if you have a tax problem, they probably want you to come back to the U.S., right? But I’m thinking maybe the guys with the guns, the IRS guys are going to be waiting in the U.S. for you maybe?<\/p>\nDARRIN T. MISH: <\/strong>I would think it would be a logical assumption that they would want you back so you could pay back the debt.<\/p>\nKATRINA MADEWELL: <\/strong>And they would\u00a0like\u00a0snatch your\u00a0passport\u00a0out of your hand kind of thing?<\/p>\nDARRIN T. MISH: <\/strong>Perhaps when you land they’re going to revoke the physical possession. I’m not really sure. I don’t think anybody knows at this point because the regulations, the final regulations haven’t been\u00a0promulgated\u00a0or whatnot.<\/p>\nKATRINA MADEWELL: <\/strong>But think about it, they want them here.<\/p>\nDARRIN T. MISH: <\/strong>For sure. I think they clearly want them here. There’s\u00a0another\u00a0kind\u00a0of interesting scenario \u00a0and there are several states, Louisiana, Minnesota, New Hampshire, and New York. Their driver’s licenses have been certified by the homeland security department. Their driver’s\u00a0licenses\u00a0are not secure enough to use for air travel. Even domestically. So now the citizens of these states are going to\u00a0have\u00a0to use their U.S. passport in order to get on an airplane to fly from New York to Michigan or\u00a0something.<\/p>\nKATRINA MADEWELL: <\/strong>That doesn’t even make sense. I just totally either I wasn’t hearing you right, or I don’t understand what you just said.<\/p>\nJEFF: <\/strong>Not everybody has a passport, only people that travel.<\/p>\nDARRIN T. MISH: <\/strong>Right, it’s expensive.<\/p>\nKATRINA MADEWELL: <\/strong>I don’t understand that.<\/p>\nDARRIN T. MISH: <\/strong>Especially for kids, it’s a horrendously challenging proposition.<\/p>\nKATRINA MADEWELL: <\/strong>How would you be required of a passport to go from Mississippi to Michigan?<\/p>\nDARRIN T. MISH: <\/strong>There’s these four states,\u00a0Louisiana, Minnesota, New Hampshire and New York that the TSA has deemed their driver’s licenses not to have the correct security features.<\/p>\nKATRINA MADEWELL: <\/strong>Oh, so like in Florida we get the star. Once we verified the post 911 they know who we are.<\/p>\nDARRIN T. MISH: <\/strong>And we have a bar code on the back they can swipe it and they can tell your driving record and all that stuff.<\/p>\nJEFF: <\/strong>So why don’t they do the same thing?<\/p>\nDARRIN T. MISH: <\/strong>In these states, I’m not sure why. Some of them are for political reasons because they want to be able to give a driver’s license to undocumented individuals. I’m not sure because these states only two of them are liberal and two of them are conservative, so I have no idea. The driver’s licenses are being basically decertified and are no longer appropriate for domestic air travel. So the issue arises and then ok, the frequent travelers in those states are going to have to use their passports. `<\/p>\nKATRINA MADEWELL: <\/strong>That would be fun to watch.<\/p>\nDARRIN T. MISH: <\/strong>Well, and I have traveled domestically on a passport and it’s funny because you get these odd looks from the people. You show your ID like five times before you get on the airplane and you get funny looks and whatnot.\u00a0These\u00a0people now are going to have to use their passports to travel domestically and then we know statistically, I don’t know, 5-10% of them are going to\u00a0have\u00a0a tax problem and could end up with their passports revoked. It’s fascinating. We’re not really clear. I think it’s just another\u00a0example\u00a0really of lawmakers, hey it sounds like a good idea,\u00a0let\u2019s\u00a0do\u00a0it! Without considering all of the ramifications.<\/p>\nKATRINA MADEWELL: <\/strong>I travel a lot so like something that I always think is, if I lost my id and I have my passport with me, at\u00a0least\u00a0I have\u00a0another\u00a0form\u00a0of I.D., you know?<\/p>\nDARRIN T. MISH: <\/strong>I have a briefcase right here in the studio\u00a0with\u00a0me and I carry\u00a0these briefcase, it has my computer and stuff like that. I carry it with me\u00a0every time\u00a0I fly someplace and my passport is actually in this bag, for exactly the reason you’re saying. Because the odds of my losing my wallet with my with my driver’s license in it, and my briefcase at the same time, are relatively slim, right? So I have a passport in there. The other\u00a0thing\u00a0that’s always been fascinating to me about passports is they have an expiration date on them, right?<\/p>\nKATRINA MADEWELL: <\/strong>Yeah, like ten years I think for adults and shorter for kids. Five years.<\/p>\nDARRIN T. MISH: <\/strong>I think it’s five years for kids. But why is the thing no longer good if\u00a0there’s\u00a0six months left on it? That\u00a0always\u00a0makes me scratch my head.<\/p>\nKATRINA MADEWELL: <\/strong>Yep, that is weird.<\/p>\nDARRIN T. MISH: <\/strong>So there’s an expiration date and then there’s a secret expiration date.<\/p>\nKATRINA MADEWELL: <\/strong>Because you might accidentally get stuck and not be able to come back\u00a0by\u00a0six months because your flight would be delayed so long.<\/p>\nJEFF: <\/strong>You can always get the new passport chip.<\/p>\nDARRIN T. MISH: <\/strong>Yeah, the RFID chip.<\/p>\nJEFF: <\/strong>Someone didn’t believe me and I had to\u00a0get\u00a0them\u00a0a brochure and it shows the guy racing through, one guy with all his bags and the next picture is the guy racing through waving his arm at the machine and it’s an RFID chip in your arm that has your passport.<\/p>\nKATRINA MADEWELL: <\/strong>What? I didn’t know that.<\/p>\nDARRIN T. MISH: <\/strong>Oh, in your arm? No.<\/p>\nJEFF: <\/strong>Oh, yeah.<\/p>\nDARRIN T. MISH: <\/strong>Ok, I think we’re going to…<\/p>\nKATRINA MADEWELL: <\/strong>you have a chip on your passport? I don’t have a chip on mine.<\/p>\nDARRIN T. MISH: <\/strong>I think we’re going to get you a special hat there, Jeff.<\/p>\nJEFF: <\/strong>No, no, no. I’ll bring you the brochure.<\/p>\nKATRINA MADEWELL: <\/strong>In a radio studio that might not be a bad idea.<\/p>\nDARRIN T. MISH: <\/strong>You know, Jeff never gets introduced on the show. Jeff is our loyal and trusty producer. He helps all of this actually happen so that you could listen to us.<\/p>\nKATRINA MADEWELL: <\/strong>And he breaks it up if we get too boring.<\/p>\nDARRIN T. MISH: <\/strong>Yeah, well, because he’s not boring. He brings up stuff like implanted RFID chips.<\/p>\nJEFF: <\/strong>I’ll bring you the brochure.\u00a0Actually\u00a0the Dade city courthouse as you walk in the passports. It’s on the right side.<\/p>\nDARRIN T. MISH: <\/strong>So there is a security concern revolving around RFID chips\u00a0right\u00a0now\u00a0and that is…<\/p>\nJEFF: <\/strong>On the driver’s license?<\/p>\nDARRIN T. MISH: <\/strong>No, just in general, especially on the passports.\u00a0There’s\u00a0concern\u00a0that\u00a0terrorists will be able to figure out how to identify somebody’s nationality and then make a remote control bomb that only goes off when a person of that nationality walks by.<\/p>\nKATRINA MADEWELL: <\/strong>Oh my goodness, with technology, anything is possible.<\/p>\nDARRIN T. MISH: <\/strong>So yet another unintended consequence I think. Getting back to the revocation of passports, it’s fascinating because I don’t\u00a0think\u00a0anybody knows how it’s going to work. I would doubt seriously that it’s going to have much practical effect in increasing collections because typically, it might actually\u00a0increase\u00a0the number of…<\/p>\nKATRINA MADEWELL: <\/strong>I mean, if you’re a drug lord or something and you’re going\u00a0between\u00a0the U.S. and Columbia and you’re invading taxes or something I could see where\u00a0that\u00a0might\u00a0be beneficial. The average person, I don’t know what that’s going to\u00a0do.\u00a0You love the stuff I make up.<\/p>\nDARRIN T. MISH: <\/strong>Another example if a criminal is going to follow a law so he could continue engaging in his criminal behavior.<\/p>\nKATRINA MADEWELL: <\/strong>Really, he’s got his own transportation, like\u00a0private\u00a0jet. He doesn’t need\u00a0your. He doesn’t need your commercial airline passport.<\/p>\nDARRIN T. MISH: <\/strong>Another issue that comes up, not to break up this laugh fest. Another issue that could come up is that American\u00a0Expatriates\u00a0who live overseas, they already have lots of\u00a0challenges where they have to\u00a0declare\u00a0their foreign bank accounts every year. Which really isn’t that big a deal if you’re not doing anything shady. It’s\u00a0really\u00a0not that big a deal, but people don’t know about it.<\/p>\nKATRINA MADEWELL: <\/strong>I don’t like it. It irritates me.\u00a0I can’t\u00a0even move my own money around without big brother watching? That irritates me. I’m a law abiding citizen that pays taxes.<\/p>\nDARRIN T. MISH: <\/strong>Well, as long as you file the F-bar form that says you have the foreign bank account in Costa Rica, which apparently is\u00a0where\u00a0you\u00a0hide your money.<\/p>\nKATRINA MADEWELL: <\/strong>I don’t. Maybe I should. I don’t know.<\/p>\nDARRIN T. MISH: <\/strong>Now what the U.S. Treasury did is they bullied every country on earth to have special recording requirements for Americans.<\/p>\nKATRINA MADEWELL: <\/strong>They\u00a0bully\u00a0every\u00a0country?<\/p>\nDARRIN T. MISH: <\/strong>They did. The literally did. Remember when we were kids, there was always movies about Swiss bank accounts and all you\u00a0needed\u00a0was a special number. Well, the Swiss have been a bastion of banking secrecy since the beginning of time practically. Since the\u00a0beginning\u00a0of banks at least. The U.S. government actually did bully the Swiss, the Swiss banks, into not only changing their laws, which regards to\u00a0Americans,\u00a0but also bullied them into disclosure\u00a0of all\u00a0Americans who had bank accounts there. This is a big deal.<\/p>\nKATRINA MADEWELL: <\/strong>I was going to say, it’s theoretically really a violation of privacy anyway.<\/p>\nDARRIN T. MISH: <\/strong>Oh, for sure. But the courts would most likely rule that you don’t have…I don’t know what they’d rule. Because we’re interesting into this realm that freedom is not really free. Without being too\u00a0overtly\u00a0blunt.<\/p>\nKATRINA MADEWELL: <\/strong>When did that happen? I didn’t even know that existed.<\/p>\nJEFF: <\/strong>A few years ago.<\/p>\nDARRIN T. MISH: <\/strong>It was post 911. It was a\u00a0knee jerk\u00a0reaction to terrorism and banking…<\/p>\nJEFF: <\/strong>Isn’t it always?<\/p>\nDARRIN T. MISH: <\/strong>…and stuff like that. Yeah.\u00a0Well\u00a0when the patriot act passed post 911 I could remember very clearly in my mind, seeing ok the guys preventing terrorists from moving money around and funding terrorist activities but very soon it will be used as a weapon for domestic law enforcement and yet another erosion of our privacies here in the United States. There are people who would say in response to what I just said,\u00a0well,\u00a0if you’re not doing\u00a0anything\u00a0wrong, what do you have to worry about? Well, ok, I agree, but what if you are the convenience store owner that has 15 grand in cash that wants to go deposit in the bank and the government\u00a0decides\u00a0to seize it and make you prove when that cash came from? We end up in the situation where we have to continue to overtly prove that our behavior is innocent as opposed to what the burden is supposed to be, which is…<\/p>\nKATRINA MADEWELL: <\/strong>You’re innocent until proven guilty.<\/p>\nDARRIN T. MISH: <\/strong>Exactly.<\/p>\nKATRINA MADEWELL: <\/strong>Think about a lot of those nationalities, not to stereotype anyone, but the ones that own some of those stores and people that come from a lot of Asian cultures and Indian cultures, they have a lot of cash like that. So it’s not uncommon for them to do that or\u00a0lend\u00a0money back and forth to family members. So it just seems a bit unfair that they would seize their money.<\/p>\nDARRIN T. MISH: <\/strong>There’s different cultures and\u00a0ethnicities\u00a0that\u00a0don\u2019t\u00a0trust banks.\u00a0There’s\u00a0regular Caucasian wasp people in the United States who are older or might have been raised by somebody who lived through the Depression. They remember soup lines and runs on banks and things like that that don’t like banks either.<\/p>\nKATRINA MADEWELL: <\/strong>If you think about that, there was a lot of things that changed from that. If people lived through that it was for a good reason because FDIC insurance was created after that time because when the banks went under, they lost their money.<\/p>\nDARRIN T. MISH: <\/strong>Exactly. That’s now why we have things like too big to fail. When we come back, we’re going to have some questions from listeners and maybe even a live call or two.<\/p>\nKATRINA MADEWELL: <\/strong>Don’t forget, you can catch Darrin on Twitter twitter.com\/darrinmish. Isn’t it darrin_mish?<\/p>\nDARRIN T. MISH: <\/strong>It is darrin_mish.<\/p>\nKATRINA MADEWELL: <\/strong>See I’m paying attention even though what we’re looking at, our bullet points are wrong.<\/p>\n <\/p>\n
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DARRIN T. MISH: <\/strong>Welcome back, I’m your host, Darrin T. Mish, the IRS Solution Attorney.<\/p>\nKATRINA MADEWELL: <\/strong>And I’m your\u00a0cohost, making it fun, not the attorney, Katrina Madewell.<\/p>\nDARRIN T. MISH: <\/strong>Katrina Madewell, real estate agent extraordinaire. Real estate agent to the stars of Tampa Bay.<\/p>\nKATRINA MADEWELL: <\/strong>Well, since half your customers are real estate agents and luckily I never have been, I gotta make it fun.<\/p>\nDARRIN T. MISH: <\/strong>Yeah, you never have been. That’s good, actually. I love my realtor, real estate agents I guess is the proper term, right?<\/p>\nKATRINA MADEWELL: <\/strong>Realtor is what you call the national.<\/p>\nDARRIN T. MISH: <\/strong>That’s how you say it real-a-tor?<\/p>\nKATRINA MADEWELL: <\/strong>No, no real-tor. Real-tor.<\/p>\nDARRIN T. MISH: <\/strong>Real-tor.<\/p>\nKATRINA MADEWELL: <\/strong>Real-tor.<\/p>\nDARRIN T. MISH: <\/strong>Ok. So I love my clients that are in the real estate business. They’re really interesting people. They’re sales people. They don’t get the math part, they just don’t get the organization part. So assuming they’re willing to do what they need to do, in terms of that, then they can be really easy to fix.<\/p>\nKATRINA MADEWELL: <\/strong>A lot of times, some of these real estate agents are \u00a0part time,\u00a0second\u00a0career, stay at home mom decides they want to a pro realtor just don’t have any of those skills.<\/p>\nDARRIN T. MISH: <\/strong>Yeah, for sure. I’ve\u00a0hear\u00a0d\u00a0it. I’ve\u00a0heard\u00a0it a lot. It’s just like\u00a0anything, when we decide to open our business, or any business it’s often because we’re a good baker so we open a bakery. We’re a good cook so we open a restaurant. We have to remember that a very significant, perhaps a majority of what goes on in a business is administrative in nature, not actually doing the thing.<\/p>\nKATRINA MADEWELL: <\/strong>Organization and those logistics that are going to keep your business open and running.<\/p>\nDARRIN T. MISH: <\/strong>Right, and profitable.<\/p>\nKATRINA MADEWELL: <\/strong>The stats that small businesses fail…<\/p>\nDARRIN T. MISH: <\/strong>Within the first five years.<\/p>\nKATRINA MADEWELL: <\/strong>…within the first couple years…are pretty high.<\/p>\n
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