This US tax grab is not fake news
J.F. writes: This is a cautionary tale of the risks of buying property in the US. My wife and I bought a holiday home in Florida in 2008 and in 2015 we decided to sell up. The property market had declined and we sold at a loss. The sale was completed in August 2015 and the conveyancing firm held back 10 per cent of the price while the Internal Revenue Service satisfied itself there had been no capital gain. It was expected this would be resolved within 40 days.
It was not and the IRS now says it will not pay out to a non-taxpayer. I obtained a temporary US tax number, but the IRS says it will not pay out on this either. All this is because I am not an American citizen and the US does not like refunding money to non-residents.
I FOUND it hard to believe the US tax authorities could feel entitled to hang on to $80,000 (about £62,000), not because the tax is due, but because you do not pay American taxes in the first place.
I found it harder to accept what happened next, though. I never expect officials to breach privacy by discussing anyone’s tax affairs, so you and your wife signed legally binding releases, confirming I was making enquiries on your behalf.
After talking to IRS headquarters in Washington DC, I emailed staff and invited them to comment. They replied: ‘It is against the law, specifically Internal Revenue Code Section 6103, for the Internal Revenue Service to discuss private taxpayer information. Based on your inquiry and the information you provided, we are declining to comment.’
This is akin to saying that if you have a tax problem with the IRS, you cannot choose whoever you like to represent you. There is an Ombudsman-style appeal process in the US, so you tried this, but the official assigned to you dumped your complaint on the bizarre grounds that there are two claimants and not just one.
As you say, a cautionary tale, and definitely not fake news.