Congress is close to passing a law that would allow the State Department to revoke, deny or limit passports for taxpayers having more than $50,000 in delinquent tax debt, including interest and penalties. The provision is titled “Revocation or Denial of Passport in Case of Certain Tax Delinquencies” and is part of a bill for highway and transit program funding.
The concept originated in 2012 when a governmental agency discussed the possibility of collecting back taxes when issuing passports, and has now picked up enough support for passage. It is expected that the effective date will be January 2016, at which time the State Department acting on information received from the IRS, can refuse to issue you a new passport or renew your passport, or even rescind it.
There will be exceptions for taxpayers:
- Who are contesting the amount owed
- Have established a payment plan
- In emergency situations or for humanitarian reasons
The provision is expected to raise nearly $400 million over the next ten years and offset some of the costs of the bill, as Congress has decided not to raise the federal gas tax.
Americans living abroad may be the group most impacted as they rely on their passports more than taxpayers living in the States and their taxes are typically more complex.
If you believe you may be affected by the new law, call East Coast Tax Consulting today to discuss your options for back tax help. We provide tax resolution and audit defense services to taxpayers throughout Broward and Palm Beach Counties from our offices in Boca Raton, Planation and West Palm Beach.