Are You Past Due With Uncle Sam? You Could Lose Your Passport

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An amendment included in the federal highway bill authorizes the government to deny or revoke passports for tax delinquent Americans. Find out how much money you have to owe before the State Department comes after your passport.

If you have a big overdue tax bill with Uncle Sam, you better pay up soon or you could lose your passport.

Under a law expected to take effect in January, the State Department will be permitted to block or revoke passports from seriously delinquent taxpayers, defined as those who have $50,000 or more in unpaid federal taxes (including interest and penalties), The Wall Street Journal reports.

Delinquent taxpayers who have a payment plan or are working to resolve their tax debt and Americans who are challenging their tax debts in court are exempt. The law also permits the State Department to issue a passport for emergency or humanitarian reasons.

The law amending the Internal Revenue Code of 1986 is tucked away in Section 32101 of H.R. 22, the highway funding bill, which has passed the House and the Senate. It’s expected to take effect Jan. 1 and apply to current debts.

“If this bill becomes law, it will be imperative for Americans traveling abroad or living abroad to pay attention to IRS notices — assuming they receive them,” David Kautter, a partner at the accounting firm RSM in Washington, D.C., told the WSJ.

Critics of the law say being able to travel is a fundamental and constitutional right. Other opponents argue that the law could have devastating consequences for U.S. citizens living abroad who are “overwhelmingly reliant” on their American passports.

Charles Bruce, an American lawyer who advises the expatriate group American Citizens Abroad told the WSJ: “Americans abroad need their passports for many routine activities of daily life, such as banking, registering in a hotel, or registering a child for school, and mistakes could be disastrous.”

The measure is expected to generate $398 million in the next decade.

What do you think of the government revoking or denying a passport for Americans who are seriously delinquent on paying their taxes? Share your thoughts below or on our Facebook page.

Stacy Johnson

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