Owe $50,000 Or More To The IRS? IRS Revoke Passport For Tax Delinquents
President Obama recently signed a controversial law that grants authority to the IRS to prevent issuance or revoke the US passport for US taxpayers that owe $50,000 or more in unpaid federal taxes (which painfully also includes penalties and interest) in which a lien has also been filed.
While the right to travel has been recognized as fundamental, if you are a US taxpayer overseas and haven’t filed a return in years or have had a tax debt that has been ignored this can have devastating effects for both travel and daily activities.
Of course, problems with travel is the obvious negative consequence of such an outcome.
However, there are many other negative consequences such as the ability to open bank accounts and other everyday activities requiring a passport such as hotel stays abroad, etc.
The bottom line is that the State Department could revoke, deny or limit passports for anyone that the IRS has certified as having a delinquent tax debt of $50,000 or more. The IRS will also have to file a notice of tax lien, which is currently done just as a matter of routine nowadays.
This is clear evidence that the U.S. is becoming increasingly more serious about the collection and enforcement of US tax laws and closing the tax gap with delinquent taxpayers.
With funding cutbacks at the IRS, most IRS offices overseas have closed and other services by phone have deteriorated due to the lack of manpower.
It has become even more challenging in this environment for taxpayers to resolve their expat tax issues and have only served to increase the value and help provided by a tax professional.
The new law goes into effect on January 1, 2016.
So, if you have delinquent tax returns and/or tax debts, now is the time to file your late tax returns and make payment arrangements to head off the possibility of having your passport revoked.
Contact Tax Samaritan today and we can help put you on the right path to preventing or resolving such an outcome.
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Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.
When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).
Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.