As published on internationalinvestment.net, Thursday October 3, 2019.
The IRS is warning US expats with large tax debts that their passports are subject to be revoked as soon as this month, jeopardizing their ability to work and live overseas.
The agency in July began sending letters to some indebted taxpayers saying it will ask the US State Department to revoke their passports.
Under law, the IRS can "certify" US passport holders to the State Department who owed more than $52,000 in overdue tax debt and were not in an agreement on the back debt. In turn, the State Department has the authority to deny a passport application, revoke or not renew a passport.
"Generally, the IRS will not recommend revoking a taxpayer's passport if the taxpayer is making a good-faith attempt to resolve their tax debts"
People who live abroad and receive the letter have 90 days to call the government and set up a payment plan, the IRS said in an email. For domestic taxpayers a response is required in 30 days.
The actions are allowed under the Fixing America's Surface Transportation (FAST) Act, which became law in December 2015 but which the government was not seriously enforcing until early last year.
The agency had sent almost 389,000 certification notices to taxpayers as of May 17 this year, according to the Taxpayer Advocate Service. The notices warn people that they've been identified as having substantial tax debt and could face repercussions under the passport program.
"Generally, the IRS will not recommend revoking a taxpayer's passport if the taxpayer is making a good-faith attempt to resolve their tax debts," said the agency.
In addition, the IRS does not currently certify taxpayers as seriously delinquent who are in bankruptcy, recognized by the IRS as victims of identity theft, whose accounts are not collectible due to hardship, or who are located within a federally declared disaster area. Also, a taxpayer serving in a combat zone is not subject to IRS certification, and the taxpayer's passport won't be revoked or application denied, until such service ends.
Since February 2019, most State Department activity has been reported to be mainly denial of passport applications and renewals.