In a new law, which the USA congress and senate are expected to pass in December 2015, Americans with serious delinquencies in the Internal Revenue Service (IRS) will have to face consequences such as having big interests and penalties, including not being able to receive and keep their passports. In a proposed law, the Internal Revenue Service will compile the names of people with great tax debts so the state department can impose penalties, such confiscating passports.
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There is little relationship.between owing taxes and passports, but the measure is estimated to raise almost $400 million over the coming 10 years.
Fatca stipulates that Americans – whether they are resident in the U.S. or not – must continue to pay taxes in the States if they opt to retain their passport.
However, the State Department could issue apassportin anemergency or for humanitarian reasons.
That means the IRS has filed a lien or levy against the overdue tax bill, without a re-payment plan in place. “It wouldn’t apply if a taxpayer is in the process of resolving tax debt with the IRS, such as by paying it on an installment plan, or if the taxpayer is contesting the collection either administratively or in court”, David Kautter, a partner at the accounting firm RSM in Washington, said in a report by The Wall Street Journal.
The new legislation will officially take effect on January 1, 2016, if all the concerned departments give the green light and provide full approval.
Its unclear how many people would be affected. The language in the law is very clear: “they can simply revoke your passport if you owe them money in their sole discretion”, wrote Soverign Man’s Simon Black, Zero Hedge reported.
The problems could be even more significant for Americans living overseas.
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The provisions most vocal critics are advocates for the a few 7 million US citizens living overseas, who need their passports for many purposes, including for work visas or residency permits, and who may not be receiving mail from the IRS. In a letter written to Congress in early-November, American Citizens overseas, a non-profit advocacy group, said no action should be taken until hearings have been held to discuss the implications that may result in its implementation.
