12.4 million delinquent accounts owe nearly $131 billion.
AB Wire
The US government has started to implement a new law passed by Congress earlier this month which allows it to revoke passports of tax delinquents – people who owe more than $50,000 to the Internal Revenue Service (IRS).
The IRS reported 12.4 million delinquent accounts owing nearly $131 billion in assessed taxes, interest and penalties in 2014, according to a report by USA Today.
In addition to going after delinquent taxpayers by revoking their passports, the FAST Act highway-transportation bill signed by President Obama on Dec. 4 also gives private debt collectors a shot at forcing taxpayers to make good on their debts. The act includes a mandate that the IRS turn over certain unpaid tax delinquencies to private debt collectors.
The passport-revoking provision allows the Department of the Treasury and the IRS to authorize the State Department to take away U.S. passports from individuals with seriously delinquent tax liabilities. That’s defined as those greater than $50,000 and for which the IRS has filed a lien or levy, according to Matthew D. Lee of law firm Blank Rome.
In a blog, he described the passport-revoking provision as a “powerful tool to force tax compliance.” Affected taxpayers would receive written notice.
The State Department is now authorized to deny, revoke or limit use of a taxpayer’s U.S. passport, and it isn’t supposed to issue a passport to anyone owing that much money (with exceptions for emergencies or for humanitarian reasons). Americans out of the country when their passports are revoked may be allowed to return home, said the USA Today report.
The number of valid U.S. passports has surged in recent years, from roughly 30 million in 1995 to 126 million this year.
The new provisions wouldn’t affect taxpayers who already have entered deals with the IRS to pay their tax debts, such as installment agreements or offers in compromise. Also, passports wouldn’t be revoked for people who are seeking hearings or who are claiming innocent-spouse relief, said the report.
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Forcing victims of fraud to move to the US could cause them to lose their jobs, homes and to become a tax burden for US residents