Passports, Please
Planning an awesome getaway overseas? Owe a large tax debt to the IRS??
You may want to reconsider your plans.
Hidden deep in the ‘Fixing America’s Surface Transportation’ Act (known as the FAST Act), is a provision giving the IRS power to revoke passports of taxpayers who owe large tax debts to the IRS.
Title XXXII, Subtitle A, Section 32101 of the FAST Act amends the Internal Revenue Code of 1986 to include Section 7345, Revocation or Denial of Passport in Case of Certain Tax Delinquencies.
The law allows the State Department to revoke, deny, or limit passports for anyone the IRS certifies as having a seriously delinquent tax debt in an amount in excess of $50,000. The $50,000 threshold includes interest and penalties, which can quickly add up. Given that, an actual tax debt of much less than $50,000 could trigger the revocation, denial, or limitation of the passport.
The IRS will be the agency to compile the list of impacted taxpayers, and will submit it to the State Department for action. There are loopholes in the law allowing exclusions for certain situations, but final discretion is left with the IRS.
A legal challenge to the provision is expected. In Kent v. Dulles, 357 US 116 (1958), the Supreme Court held that the federal government cannot restrict the right of travel without due process.
Stay tuned to this one!