Overview
Supreme Court Grants Review in Internet Sales and Use Tax Case: Today, the US Supreme Court granted certiorari in South Dakota v. Wayfair, Inc. et al., No. 17-494, a case challenging South Dakota’s “economic nexus” law requiring remote sellers without a physical presence in the state to collect use tax on sales to South Dakota customers. South Dakota’s law is one of a number of recent state legislative initiatives aimed at avoiding or directly challenging the physical presence standard for remote sales and use tax collection established in Quill Corp. v. North Dakota, 504 U.S. 298 (1992).
IRS and State Department to Begin Implementing Passport Restrictions for Seriously Delinquent Taxpayers: The IRS issued Notice 2018-01, which provides taxpayers with information about the implementation of new section 7345, enacted in December 2015. Under section 7345, Treasury is required to notify the State Department when an individual is certified as having a “seriously delinquent tax debt.” Upon receipt of a section 7345 certification, the State Department generally must deny any application for the issuance or renewal of a passport from the individual, and may revoke or limit a passport previously issued to the individual. The Notice provides that the IRS and the State Department will begin implementation of these provisions this month.
With certain exceptions, a seriously delinquent tax debt generally means an unpaid, legally enforceable, and assessed federal tax liability of an individual, greater than $50,000, and for which either (i) a notice of federal tax lien has been filed under section 6323, and the taxpayer’s right to a hearing under section 6320 has been exhausted or lapsed; or (ii) a levy has been issued under section 6331. The $50,000 figure is adjusted for inflation after 2016.