The IRS has remarkable investigative tools and collections procedures at its disposal. Say what you will about the Patriot Act, it does not oblige Americans to file detailed paperwork annually with the Department of Homeland Security detailing their personal affairs, business arrangements, housing situation, health-insurance coverage, etc. The IRS has that power, and then some: It can seize assets, garnish wages, put liens on property, and more. Still, there are occasions when it finds itself unable to collect a debt. Sometimes, that is because it is dealing with a crafty person who manages to hide his income and property from the government. More often, that is because it is dealing with a person who simply cannot pay.
What’s worse is that there is no appeal, no procedural remedy in the law, no redress for those who have been wrongly targeted — and we know the IRS has a history of wrongly targeting Americans its agents perceive as political enemies. The sole remedy available to Americans who wrongfully lose their passports to the IRS — or who fail to have them reinstated after making good on their taxes — is to file a civil action against the agency under 26 USC 7345. Suing the IRS is an expensive and difficult proposition, especially for people who are likely already to be in a difficult financial situation.