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STRATEGIC TAX LAWYERS:  TAX BLOG

No Taxes, No Passport

Tuesday, November 24, 2015

The new year is usually full of travel as people are starting to make plans for business and for leisure. What Congress is ready to enact at the start of this new year may actually pose a challenge to many people who are going to travel, especially for Americans who have not paid their taxes. A new law starting in 2016 may have the U.S. State Department denying passports to U.S. taxpayers who owe the IRS taxes, as well as revoking the existing passports of U.S. taxpayers who have a tax debt. The new rule is part of H.R.22, a highway funding bill.  Basically, if you don’t pay your taxes, you will have no choice but to stay put since you’re not going to be going anywhere. 

Tax experts estimate that this new law could save the federal government nearly $400 million over the next ten years. Next month, Congress will enact this new law which will give the federal government the ability to rescind the passports of Americans who have a tax debt and have not made plans to settle it.  With this new law, the U.S. State Department will be able to deny new passports to those who have tax delinquencies.

The taxpayers most affected will be those with tax delinquencies equaling $50,000 or more, and will include interest charges and related penalties. If a U.S. citizen needs to travel for a certain humanitarian cause, that will be an exception if they happen to have tax debt.  However, if a U.S. taxpayer is on a current IRS payment plan or has a pending tax case pending in tax court, then this humanitarian rule will not apply to them. 

There are many people and affinity groups who are against this new law.  Those most upset about this proposed regulation are U.S. citizens who reside in foreign countries and may not receive the IRS’s mail in a timely manner. There have been many instances when Americans living abroad did not receive correspondence from the IRS, which caused issues with their tax status.  Americans living outside the U.S., rely on their passports for everything, thus leaving them without a passport could be a very big mess. 

Do you have tax debt that you owe the IRS? Is that tax debt over $50,000? Do you have a tax lien filed against you?  The Strategic Tax Lawyers, LLP are IRS CP-523 Attorneys, BOE Tax Attorneys, and IRS Levy attorneys who specialize in the tax code with years of experience in tax-related and IRS issues. The Strategic Tax Lawyers have over fifteen years of experience successfully helping clients with levies.  If you or anyone you know received a notification from the IRS or if you are at risk of having a tax lien placed against you, contact the Strategic Tax Lawyers at (800) 669-4775 for a free case consultation.