IRS Uses Rarely Used Writ to “Imprison” Taxpayers for Failing to Pay Tax Debt – Los Angeles Income Tax Planning and Income Tax Litigation Attorney Bruce Givner

by Bruce Givner on November 29, 2013

The Internal Revenue Service (IRS) has used one of its little used tools, a Writ of Ne Exeat Republica, to “imprison” two taxpayers for unpaid tax. U.S. v. Barrett, Case No. 10-CV-02130 (D.Colo., Aug. 13, 2013).

According to the IRS, Mr. and Mrs. Barrett filed a false 2007 federal income tax return and received a refund of over $200 thousand. The Barretts then deposited the refund, which was then wired through and to several banks. Eventually over $64 thousand was deposited into a bank account the couple set up in Uruguay. However, after reviewing the Barretts 2007 return, the IRS assessed the amount of the refund against the Barretts. The IRS also filed a Complaint in the U.S. District Court for the District of Colorado asking the Court for a Writ of Ne Exeat Republica, to force the Barretts to repatriate any part of the refund that the Barretts had wired out of the U.S.

When the Barretts did not respond to the Complaint, the Court entered a default judgment against the couple for the unpaid tax and issued the Writ. When the Barretts tried to leave the U.S., under the Writ their passports were seized until the Barretts could post a cash bond equal to the unpaid tax or the net equity value of his or her assets worldwide.

Though rarely used, the Writ of Ne Exeat Republica is a powerful IRS tool because it may keep a taxpayer from taking his or her assets and leaving the U.S. Further, because it essentially forces a taxpayer to stay in the U.S., it can be seen as a form of “imprisonment,” which generally is not allowed to collect unpaid tax.

Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Encino, Sherman Oaks, Tarzana, Woodland Hills, Agoura, Westlake Village, Thousand Oaks, Studio City, Burbank, Glendale, Pasadena, Bel Air, Brentwood, Pacific Palisades, Marina Del Rey, Manhattan Beach, Torrance, Irvine, Newport Beach, Las Vegas and adjacent areas. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.

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