Held Hostage Overseas? The IRS Wants Your Back Taxes.
The IRS fines hostages for taxes they couldn't pay while they were detained. A bill in Congress is trying to fix this.
Many Americans who return home after being illegally detained overseas arrive to find they've been billed thousands of dollars by the IRS—including late fees for unpaid taxes.
That's the bizarre situation in which hostages Evan Gerskovich, Paul Whelan, and Vladimir Kara-Murza found themselves after they were released from detention in Russia last month. All three men say they faced a battery of surprise financial issues after returning home, including tax charges and hits to the credit stemming from bills they were unable to pay while behind bars.
"I got one of those bills from the IRS saying, you owe this much on this year, you owe this much on this year because of failure to pay on time—here's the interest that's accrued," Washington Post reporter and former hostage Jason Rezaian told NPR. He faced more than $6,000 in fees for unpaid taxes after his release, following 544 days of detention in Iran. "This is an oversight that nobody really thought about."
And they're not alone. Right now, between 40 and 60 American nationals are being illegally detained by other nations, according to NPR. Many of these Americans will return home to face startling financial penalties stemming from their unjust imprisonment.
The IRS, for its own part, claims that it doesn't have the legal authority to remove tax fees for returning hostages. However, that could change. Earlier this year, Sen. Chris Coons (D–Del.) introduced the Stop Tax Penalties on American Hostages Act, an aptly named bill that would require the IRS to exempt hostages from tax liability during the period of their detainment. The bill would also force the IRS to allow hostages and their spouses to apply to have their tax-related fines removed.
If Coons' bill passes, it would solve a small but frustrating problem in our robotic tax system. It's a no-brainer that someone illegally detained abroad can't pay their Netflix subscription on time—much less their taxes. In addition to dealing with the horrors of being held hostage in a foreign country and dealing with the rocky transition back to normal life, former detainees shouldn't also get slapped with thousands of dollars of fines for taxes they never could have paid in the first place.
