Seriously Delinquent Tax Debt. Seriously.

Hello my fellow Taxpayer!

Have you ever wondered what the IRS considers a “seriously delinquent tax debt?” Seriously. Well, wonder no more. $50,000 (or greater, adjusted annually for inflation). Yep. Seriously delinquent tax debt (SDTD) begins at $50,000. How do I know that? Well, the IRS says so. See Internal Revenue Code (IRC) Section 7345. Now, do not panic. There are a few more “moving parts” before the IRS can “certify” a tax debt as SDTD. And, there are some exclusions such as if the Taxpayer is timely paying under an installment agreement. You might be wondering why it matters if your tax debt is a SDTD. Tax debt is tax debt, right? Yes, but – if your tax debt is a SDTD, the IRS can tell the State Department, and your passport can be denied or revoked! That’s right. You will need to put that European sojourn on hold. Bummer!

Now, in my view, $50,000 is a low “threshold.” But some Taxpayers just cannot help themselves and “tempt fate” by rubbing their SDTD in the IRS’s face. Such is the case of one Prince Amun-Ra Hotep Ankh Meduty. Yes, that is REALLY his name. Don’t believe me? Well, go read Prince Amun-Ra Hotep Ankh Meduty v. Commissioner of Internal Revenue 160 T.C. No 13, Docket No. 32817-21P, Filed May 23, 2023 (fresh out of the Tax Court’s oven). Mr. Meduty (I know, the 5 year-old in me laughed when I read that in the Tax Court’s opinion) made a whole bunch of silly arguments, “a panoply of silly and frivolous arguments” was the exact language used by Tax Court Judge Urda. I will not bore you here. Read the opinion if you are curious. Silly as a goose.

There is one treat for you if you choose to read the opinion. You will learn what Mr. Meduty was “formerly known as.”