[Readings] A Tax Break for Hostages | Harper's Magazine

Sign in to access Harper’s Magazine

Need to create a login? Want to change your email address or password? Forgot your password?

  1. Sign in to Customer Care using your account number or postal address.
  2. Select Email/Password Information.
  3. Enter your new information and click on Save My Changes.

Locked out of your account? Get help here.

Subscribers can find additional help here.

Not a subscriber? Subscribe today!

Get Access to Print and Digital for $23.99.
Subscribe for Full Access
Get Access to Print and Digital for $23.99.

A Tax Break for Hostages


From an Internal Revenue Service memorandum distributed to regional and assistant commissioners.

date: January 4, 1989
subject: Taxpayers Taken Hostage in Terrorist Action

The Service has had procedures for some time to deal with cases in which a taxpayer has been reported killed in terrorist action (KITA).
It has become obvious that the taking of hostages in terrorist actions must be considered in a similar light, and that a permanent program is necessary. A policy statement is currently in clearance specifying that, except in egregious circumstances, the Service will take no enforcement action during the period a hostage is held captive and for a yet-to-be-determined period of time thereafter.

The International Division has agreed to monitor hostage accounts, but to streamline this process and ensure adequate safeguards, we requested program changes to identify these taxpayers and prevent enforcement action.

In January 1989, International will input an “HSTG” indicator on all known hostage cases. This will suppress the issuance of enforcement-related notices and Taxpayer Delinquency Investigations (TDIs).

In April 1989, the “HSTG” indicator will be enhanced to suppress all balance-due activity, including the issuance of Taxpayer Delinquent Accounts (TDAs) and the reactivation of Currently Not Collectible cases.

In summary, the above restrictions will prevent issuance of notices, TDAs, and TDIs. Any account that has already progressed into TDA or TDI status must be suspended manually.

More from