Following up on my previous post, Americans Wrongfully Detained Around The World Face An Additional Challenge At Home: The IRS: Informa, Wrongfully Detained Americans Welcomed Back with IRS Penalties:
The tax man waits for no one. Unable to file tax returns while wrongfully detained, hostages are often welcomed back to the homeland with a tax bill. Case in point, the three freed Americans who were held hostage in Russia are now facing Internal Revenue Service fines and fees assessed while they were in captivity.
Wall Street Journal reporter Evan Gershkovich, former marine Paul Whelan and Russian-American journalist Alsu Kurmasheva were freed as part of a complex prisoner swap on Aug. 1, 2024. Gershkovich was detained for nearly 1 1/2 years, Kurmasheva for almost 10 months and Whelan for over five years. Now that they’re home, they’ll need to get their affairs in order, including sorting out IRS penalties and accruing interest assessed on individuals who fail to file their tax returns. When it comes to issuing penalties, the IRS doesn’t discern unlawfully detained citizens from those unscrupulous individuals avoiding taxes, as there’s no pause or postpone option available while wrongfully detained.
Per the IRS, the failure to file penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late; the penalty won’t exceed 25% of unpaid taxes. After that period, a failure to pay penalty will continue until the tax is paid, up to a maximum of 25% of the unpaid tax, plus interest. ,,,
Assessing taxes on these individuals in the first place seems unfair and like a slap in the face, but, unfortunately, it’s not the first time it’s happened, as a growing number of Americans are being wrongfully detained by hostile government regimes. According to a 2023 Wall Street Journal article, Washington Post correspondent Jason Rezaian, released from Iran in 2016 after 544 days of wrongful imprisonment, came home to a $200,000 tax bill for unpaid taxes. He stated that while the IRS was apologetic over his tax bill, he was only able to have the agency reduce the amount he owed to around $6,000, stating that “[w]hile the agency has some discretion to waive penalties, it doesn’t have the legal authority to forgive taxes or interest on the basis that the filer has been wrongfully detained.”
Fox News, Evan Gershkovich, Freed Americans Now Face IRS Fines, Fees For Time They Were Russia’s Hostages:
Senate Majority Leader Chuck Schumer on Sunday spoke to reporters about the IRS burden, which he termed a "little known fact," that Evan Gershkovich, Paul Whelan and Alsu Kurmasheva will each face now that they have returned to the U.S.
"Each of these freed hostages will have fines and fees from the IRS," Schumer said. "Now that they're back home, they'll need help from the IRS back here at home because they have, in some cases, had no years of IRS filings that lead to fines, fees and payback. It's not something you think of, but it happens all the time. We know that these people have not cheated on their taxes." …
The IRS told Fox Digital in a statement on Monday that the agency is ready to work with affected families.
"The IRS is committed to working with any individual who has been held hostage or unlawfully detained to resolve any tax issues that may arise from these heart-wrenching and unconscionable situations," the IRS statement said. "Because of federal privacy laws, we can’t comment on anyone’s particular tax situation. As we have in previous situations, the IRS is fully prepared to work with affected tax filers and their families — as well as Congress — to provide the maximum penalty relief and any other appropriate accommodation available under federal law."
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