Can the IRS Take my Passport?

Can the Internal Revenue Service really impact my ability to travel?  If you owe taxes to the Internal Revenue Service, especially “seriously delinquent tax debts” the answer is yes, the IRS can impact your travel plans by impacting your passport as discussed below.

In January of 2018, the Internal Revenue Service announced it will implement new procedures that could impact an individuals ability to obtain or maintain a passport.  The IRS stated these new procedures will impact those individuals that have “seriously delinquent tax debts.”  Under the Fixing America’s Surface Transportation (FAST) Act, the IRS is required to notify the State Department of certain taxpayers owing seriously delinquent tax debts.  The FAST Act also requires the denial of passport applications, renewals of passports and in some cases even the revocation of an individual’s passport.

So what constitutes a seriously delinquent tax debt?  Generally, the IRS has defined a seriously delinquent tax debt as someone who has a tax debt to the IRS of more than $51,000.  The $51,000 threshold would include tax, penalty and interest for periods whereby the IRS has filed a Notice of Federal Tax Lien or issued a levy, and the taxpayer can no longer properly challenge the lien or levy action.

If you are taxpayer with a seriously delinquent debt to the IRS, you can likely avoid the IRS contacting the State Department by taking the following action(s).


  • Pay the debt in full;
  • Paying a settlement amount through a tax settlement or offer in compromise with the IRS;
  • Paying the tax debt under a formal installment agreement with the IRS;
  • Paying the tax debt through a formal settlement with the Department of Justice;
  • Suspending collection action by the IRS through an innocent spouse claim; or
  • Requesting a Collection Due Process Hearing with a levy.


A taxpayer under the following situations should not be at risk for having their passport rights impacted.


  • The taxpayer has filed and is in bankruptcy;
  • Is an identity theft victim;
  • The taxpayer’s account has been determined non-collectible by the IRS;
  • The taxpayer is located in a federally declared disaster area;
  • The taxpayer has a pending installment agreement with the IRS;
  • The taxpayer has a pending offer in compromise with the IRS; or,
  • The taxpayer has an adjustment that with satisfy the IRS debt in full.


In short, to prevent any passport issues if you owe taxes to the IRS, if the tax debt is being addressed, your likelihood of having  a passport application denied or a passport revoked is severely lessened.

The above article has been prepared by John McGuire of The McGuire Law Firm.  John is a tax attorney and business attorney and can be reached through

Please remember this article is for informational purposes only and you should consult directly with your tax attorney regarding any tax matters or questions.

Tax Attorney

Denver Tax Attorney

What is an Abusive or Illegal Tax Scheme

What is an abusive tax scheme?  You may have heard of a program or scheme that promises to eliminate or substantially lessen your tax burden and taxes due to the Internal Revenue Service.  A promoter of such a scheme is likely to use financial instruments such as a trust and/or pass through entities such as a limited liability company or limited partnership.  When these programs and schemes are used improperly and to facilitate tax evasion, IRS may criminally investigate the scheme and prosecute the promoters as well as investors.  You should remember that if something sounds too good to be true, it could be, and could lead investigation by the Internal Revenue Service and potential criminal tax charges.  It is recommended that you discuss any potential tax scheme or program with a tax attorney.  The article below will provide more information regarding abusive tax schemes, but this article is for informational purposes only, and please always discuss your specific issues with a tax attorney.

Overtime tax schemes have developed from relatively simple single structure arrangements into more complex and sophisticated overall schemes and strategies that take advantage of foreign jurisdictions and financial secrecy laws.  The Internal Revenue Service Criminal Investigation has a national program to fight these illegal tax schemes and programs and prosecute violators with criminal tax charges.  Our government has and will continue to criminally prosecute the promoters of illegal tax schemes and those who play substantial roles in aiding or assisting the tax scheme, which could include investors into the tax scheme.  The biggest question when initially looking at these issues is, what constitutes an abusive or illegal tax scheme and could lead to criminal tax evasion and criminal tax charges?  In short, an abusive tax scheme that could lead to criminal matters would violate the Internal Revenue Code and related federal statutes.  Furthermore, generally the violations of the federal tax law and related statutes would use domestic or foreign trusts as well as pass through entities such as partnerships as vehicles in violating the federal tax laws.  In recent years, foreign bank accounts and other financial accounts have been used more frequently to accomplish tax evasion because of reporting issues (one may refer to FATCA for further information).  Many foreign banks and financial institutions do not report income such as interest and dividends, and thus there is no record of the income to the trust, entity and individuals.  With no reporting to the federal government, and no reporting on applicable tax returns, the income goes unreported.

As stated above, foreign accounts or trusts may be used frequently in illegal tax schemes.  A common scheme that may have many variations may flow as follows.  A United States citizen has a business in the United States and also forms a foreign corporation and foreign bank account in the same name of their US business.  When checks are received, the checks are processed through the foreign business and foreign bank account.  The foreign account will likely be in a foreign jurisdiction that does not report income and related items to the US government.  Thus, the income goes unreported on the taxpayer’s tax return and there are no 1099s issued to the US government to have any knowledge of the account and thus income going into the account.  Some schemes will involve a foreign business that issues invoices to a United States business.  The invoices are paid to the foreign business and a deduction taken by the US business, but the income of the foreign business is not claimed.  The business are commonly owned and the US citizens involved are not claiming the income of the foreign business.  Again, we have unreported income into a foreign account, and likely interest and/or dividends in a foreign account that would not be reported.  The above examples could go many more layers deep, but provide good examples as to how an illegal tax shelter or abusive tax scheme could be established.

The above article has been prepared by John McGuire of the McGuire Law Firm for informational purposes, and should not be relied on as legal advice.  Mr. McGuire is a tax attorney, representing individuals and businesses before the Internal Revenue Service and can be contacted directly through the McGuire Law Firm.

Forms Filed With the Streamlined Offshore Voluntary Disclosure Program

For many individuals, the Streamlined Offshore Voluntary Disclosure Program provided welcome relief in comparison to the “initial” Offshore Voluntary Disclosure Program.  Many taxpayers with foreign accounts and assets contact wonder what forms and documents must be filed to apply for the Streamlined Offshore Voluntary Disclosure Program.  In general, taxpayer’s must file the necessary FBARs, amend the necessary 1040s (1040X) and Form 14654.  Further, based upon the facts and circumstances, other forms may not be prepared and filed.  You should always discuss your requirements with your tax attorney and/or other tax advisors.  The video below has been prepared to provide additional information regarding the forms filed with the streamlined program.  You can contact The McGuire Law Firm to discuss your issues directly with a tax attorney.

Amending an Offer in Compromise

When an offer in compromise is submitted to the IRS, the IRS may agree that the taxpayer is an offer candidate, but not agree with the original offer in compromise amount.  Thus, can the initial offer in compromise be amended?  Yes, the offer can be amended to reflect a different amount and terms.

This issue is discussed in the video below by John McGuire, a tax attorney at The McGuire Law Firm.

You can contact The McGuire Law Firm to speak with a tax attorney.

Non-Willful Conduct Under Streamlined Offshore Voluntary Disclosure Program

Non-willful conduct is required under the Streamlined Offshore Voluntary Disclosure Program (Streamlined OVDP).  If the failure to report foreign bank accounts and/or foreign financial assets was non-willful, you may be subject to a lower penalty base.  The key question is, what constitutes non-willful actions by a taxpayer?  Generally, the IRS would consider non-willful to mean the conduct or failure to properly report was due to a mistake, negligence or based upon a good faith misunderstanding of the law.  Perhaps an understandable lack of knowledge may lead to non-willful conduct.

The video below also provides a short explanation of non-willful conduct, which of course is based upon the facts and circumstances of each case.  Please remember to consult with your tax attorney directly if you have questions relating to FATCA, FBAR filings and/or other foreign tax compliance issues.

You can contact The McGuire Law Firm to speak with a tax attorney regarding your issues.

Your Right To Notice and a Hearing Before the IRS

As taxpayer you have the right to notice and a hearing prior to the IRS enforcing collection of any tax due.  After the IRS has issued a series a notices, the IRS must issue a Final Notice of Intent to Levy and allow you 30 days to request a hearing, which is generally referred to as a Collection Due Process Hearing.  During this hearing you can provide information and a proposal to prevent enforcement action such as an installment agreement or an offer in compromise.  This is the due process afforded to you and can be very beneficial in resolving an issues with the Internal Revenue Service.  The video below has been prepared by a tax attorney to provide additional information regarding your right to a hearing.

If you have any questions or are experiencing problems with the IRS, you can speak with a tax attorney by contacting The McGuire Law Firm.  The McGuire Law Firm has offices in Denver, Golden, Broomfield and DTC where you can meet with a tax attorney.

Who Can Represent Me Before the IRS?

If you are under audit by the IRS, have received a notice of deficiency or the IRS is attempting to collect past due taxes, you can receive representation.  The video below has been prepared by a tax attorney at The McGuire Law Firm to provide information regarding who can represent you before the Internal Revenue Service.

John McGuire is a tax attorney in Denver, Colorado at The McGuire Law Firm.  John’s practice focuses primarily on issues before the IRS, tax planning & analysis and advising individual and business clients on the tax implications of certain transactions such as the purchase or sale of a business.

When is a Collection Due Process Hearing Available?

A taxpayer has the right to a collection due process hearing with the Internal Revenue Service Appeals Office under certain circumstances.  This hearing can be very beneficial to a taxpayer in terms of preventing enforcement action such as a bank levy or wage garnishment and by a means to establish or propose an agreement with the IRS such as an installment agreement or offer in compromise.

The video below has been prepared to provide information as to when a taxpayer may be able to request a collection due process hearing.  If you are experiencing any issues with the IRS, you can speak with a tax attorney, by contacting The McGuire Law Firm.   As a tax attorney John McGuire has assisted many individual and business taxpayers before the IRS, including via collection due process hearings with the IRS Appeals Office.

Denver IRS Tax Attorney

IRS Appeal Rights

What are my rights as a taxpayer?  What appeal rights do I have regarding IRS actions or decisions?  These are common questions a taxpayer may have when a tax liability is owed to the IRS and the taxpayer is in the collection process with the IRS.  The information below has been provided for general information purposes.  If you owe taxes to the IRS and/or the IRS is attempting to collect the tax liability, it is highly recommend you speak with a tax attorney regarding a resolution to the matter.

Many IRS collection actions can be appealed to the IRS Appeals Office.  The appeals office is a separate office from IRS collections and is supposed to make independent decisions apart from IRS collections.  You can review Revenue Procedure 2012-18, which provides more in depth information regarding the IRS appeals’ office independence from collection.

The appeals office follows two main procedures regarding appeal action.  These two procedures would be Collection Due Process (often referred to as CDP) and Collection Appeals Program (CAP).

A Collection Due Process Hearing would be available under the following circumstances:

  • The IRS Filed a Notice of Federal Tax Lien
  • The IRS Issued a Final Notice of Intent to Levy
  • The IRS Issued Notice of Jeopardy Levy
  • The IRS Issued a Notice of Levy on Your State Tax Refund
  • Post Levy you request a hearing

A Collection Appeals Program would be available under the following circumstances:

  • Before or after the IRS files a Notice of Federal Tax Lien
  • Before or after the IRS levies or seizes your property
  • Upon the termination or proposed termination of an installment agreement
  • Upon the rejection of an installment agreement
  • Upon the modification or proposed modification of an installment agreement

A Collection Appeals Program (CAP Appeal) will generally result in a quicker appeals decision and as stated above is available for somewhat of a broader set of circumstances.  However, one should not that you cannot go to court after the CAP Appeal if you disagree with the CAP decision.

Can I represent myself?  This is a common question, and yes, just like in any court matter you can represent yourself, but you may want to consider speaking with a tax attorney if you are not experienced in IRS procedure and tax law. You can also be represented by a family member, or if you are business, a full time employee can represent the business or partners and/or officers of a business can represent the business.

The above article has been prepared by John McGuire of The McGuire Law Firm.  Mr. McGuire’s practice focuses primarily in taxation, including the representation of both individual and business taxpayers before the IRS.

IRS Appeal Rights Denver Tax Attorney


Embezzlement or Fraud Involved With 941 Taxes

Embezzlement or theft may be a more frequent issue faced by small and medium sized businesses than many people think.  Often office managers or employees will improperly take money or assets from a business.  Although, perhaps not as common as an employee misappropriating monies or assets, I have seen professionals, such as the businesses CPA embezzle or steal money, which when done is typically a much higher dollar amount and more damaging to the company.  One means by which I have witnessed a CPA or professional embezzle monies from a business is through the employment tax (941 tax) process whereby federal tax deposits are paid to the IRS on a weekly or monthly basis.  Below I have provided examples of this embezzlement or fraud scheme, which hopefully can prevent some business owners from falling victim.

One situation whereby I have witnessed a CPA or office manager involved with theft or embezzlement from a company was when the CPA or office manager was preparing the 941 employment tax returns and in charge of making the federal tax deposits.  The scheme was conducted under the following facts & circumstances.  The corporation would run payroll and net payroll checks would be paid to all employees and officers.  A payroll report was provided to the corporation stating gross payroll, net payroll and the total employment tax liabilities.  The correct amount(s) were withdrawn from the corporation’s bank account to pay the tax deposits, but the deposits were not paid to the federal government or state agencies.  The deposits went to another account, usually an account under the control of the third party responsible for the embezzlement or fraud.

Thus, when looking at the bank statements, payroll records and 941 tax returns, everything would appear ok.  The net payroll was paid to employees and the appropriate amount was being withdrawn for tax deposits.  The internal books of the business would be in line.  When preparing the 941 returns, the correct return was provided to the necessary parties or officers for review and signature, but then a zero ($0) 941 was filed or no 941 was ever filed at all.  The business owners can be personally responsible for the trust fund portion of the 941 tax!

You may be asking yourself, how does the IRS catch on, or why did the IRS not catch on?  The IRS will catch on, because in all likelihood the business must issue correct W-2s to employees so employees can file their individual returns.  Eventually, the IRS will see that the W-2s are not matching up with the 941s and the federal ta deposits, but this could easily occur 12-24 months after the fact and thus the fraud could have been ongoing for 24-36 months.  Furthermore, if the individual responsible for the fraud also receives the IRS notices and is responsible for IRS contacts, knowledge to the business owners could be further delayed.

As a business owner, what can you?

  • Making the actual federal tax deposits yourself is the safest manner to prevent this fraud or embezzlement
  • If you do not make the deposits, make sure you obtain receipts of the deposits paid through and check these deposits against the bank withdrawals and applicable documents
  • Make sure the 941s are accurate based upon payroll and ensure they are filed. If filed and a balance is due, you would receive a notice within 15-60 days.
  • Make sure you are receiving all IRS and tax notices.

If you or your business have been the victim of theft or fraud through a similar 941 scheme, please feel free to contact The McGuire Law Firm to discuss your options with the IRS.

CPA Theft CPA Embezzlement