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Owing Uncle Sam back taxes can seriously hamper your travel plans outside the United States.
A newly implemented federal law — known as the Fixing America’s Surface Transportation Act, or FAST Act — requires the Internal Revenue Service to provide the U.S. State Department with a list of Americans who have seriously delinquent tax debt, CBS MoneyWatch reports.
The State Department can then deny, revoke or limit passports for the delinquent taxpayers. Forbes explains:
“The law isn’t limited to criminal tax cases, or even cases where the IRS thinks you are trying to flee. The idea of the law is to use travel as a way to enforce tax collections.”
Although the effective date of the law — which was approved by Congress in 2015 and then signed by former President Barack Obama — was Dec. 4, 2015, the IRS now is ready to start implementing it in March.
The law applies to Americans with seriously delinquent tax debt of $50,000 or more who have a tax levy issued or a tax lien filed against them. According to CBS MoneyWatch:
While [$50,000] sounds like a lot, it also includes penalties and interest — and anyone who has been notified about unpaid taxes knows that interest and penalties can add up fast.
CBS MoneyWatch says the IRS considers the following people to be “excepted” from the FAST Act:
- Individuals who have an installment agreement with the IRS to pay back taxes.
- Individuals who have settled their back taxes through an offer in compromise or a Justice Department agreement.
- Individuals who appeal a tax levy through an IRS collection due process hearing.
- Individuals who file Form 8857 and request innocent spouse relief.
According to Forbes, before it denies a passport, the State Department will hold your application for 90 days to give you time to resolve erroneous certification issues, pay your tax debt in full or enter into a payment agreement with the IRS.
Beginning in March, you can call the National Passport Information Center at 877-487-2778 to discuss your specific situation.
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