By: Tom Andrews, CPA
Being detained at the border for back taxes is something I thought unheard of 10 years ago. How on earth would the Internal Revenue Service and Homeland Security ever be able to coordinate internal systems to flag United States Citizens and non-residents at the border for unfiled and unpaid taxes? Apparently they have coordinated their systems and the IRS has established procedures to facilitate tax collection from taxpayers who live and frequently travel outside the United States. If a tax payer has an unpaid tax liability and is subject to a “Notice of Tax lien”, the IRS may now submit information to the Treasury Enforcement Communications System (TECS). This database allows the Department of Homeland Security (DHS) to identify taxpayers with open tax liens and unpaid assessment.
Upon detention US Customs agents will then interview taxpayers to ascertain what assets they have in the Unites States, car registrations, homes, etc. Agents also may inquire about the taxpayer’s employment relationships in the United States or any personal services performed in the United States to establish wage garnishment opportunities. DHS will then refer the case to the IRS who will in turn make contact with the individual while they are traveling in the United States.
Before taxpayers panic every time they pass through customs you should note that the procedures governing TECS have two key requirements before taxpayers may be flagged:
- The individual must live outside the United States (or travel in and out frequently); and
- The individual taxpayer must have an existing federal tax lien.
The problems with such a system is that a taxpayer may be unaware that a lien has been filed in their name and if a taxpayer pays off the lien it may take time before the flagged taxpayer is purged out of the TECS system.
I would recommend that if a taxpayer is concerned that they have a potential tax lien or they move so frequently the receipt of mail cannot be relied upon that they contact the IRS directly at 800.829.1040 and confirm that their tax account is clear. Please remember that even if you do not receive a letter or call from the IRS indicating a problem it is still the taxpayer’s responsibility to be certain that they are in compliance with US tax law and there are not outstanding liabilities.
I’ve noticed for years that the world is closing in on the yachting community, as technology increases so does the ability for government agencies to communicate with each other on a level that was unheard of years ago.