Taxman's Cold Heart: US Hostages Still Choked by IRS Penalties - Here's Why Congress Won't Save Them

It's a story that's hard to swallow: American hostages, freed from the clutches of evil oppressors, only to be welcomed back home with a hefty tax bill. And we're not talking about a minor inconvenience; the penalties and interest they owe to the IRS can be staggering. It's enough to make one question the very system that's supposed to support them in times of crisis.

Lawmakers, at least, are on the same page. Both sides of the aisle agree: this is an unjust situation that needs fixing. After all, it's hard to blame people for not paying their taxes when they're being held captive by terrorists or rogue states. The idea of sending the IRS after them, demanding payment in exchange for their freedom, seems counterintuitive at best.

However, as with so many issues, the devil's in the details. Congress can't agree on the specifics of a fix, with the House and Senate at odds over a provision involving nonprofit groups. It's a quagmire that has stymied efforts to pass legislation aimed at alleviating the financial burden on American hostages.

To understand the full scope of the issue, let's take a look at some real-life examples. One such case is that of Jeffrey Fowle, an Ohio native who was imprisoned in North Korea for six months after leaving behind a Bible as a gift for his tour guide. Upon his release, Fowle was greeted as a hero - but he also received a tax bill from the IRS in the amount of $30,000, due to penalties and interest on unpaid taxes during his captivity.

Fowle's story is not unique. Jason Rezaian, a journalist who was imprisoned in Iran for 18 months on espionage charges, also owes the IRS a hefty sum - $70,000, to be exact. The irony of Rezaian's situation is compounded by the fact that the US government spent millions negotiating his release; only to have the IRS swoop in and demand a share of the liberation 'expenses'.

The issue affects not only the hostages themselves but also their families, who often bear the brunt of the financial burden. In some cases, the penalties owed to the IRS can exceed the actual taxes owed, resulting in an absurd and confiscatory situation that leaves those affected feeling hostage to the system, all over again.

At the heart of the issue lies a policy that views the period of captivity as 'not a valid reason' for filing taxes late. It's a stance that seems tone-deaf at best - especially considering that the IRS already provides tax breaks for military personnel serving in combat zones.

Recently, lawmakers proposed a bill that would offer tax relief to American hostages and their families. While the House version of the legislation was met with bipartisan approval, the Senate version remains hung up over a provision related to tax-exempt deductions for donors to qualified nonprofit organizations.

Those on both sides agree that the relief for hostages is vital but struggle to see eye to eye on other policy matters. As a result, the bill is stuck in limbo - and it seems the hostages will have to wait a bit longer to find out whether or not Congress will come to their aid.