Passport Revocation for Unpaid Taxes: Brager Tax Law Group Warns of Act’s Extraordinary Impact
LOS ANGELES, Dec. 07, 2015 (GLOBE NEWSWIRE) — If you think the Fixing America’s Surface Transportation Act (FAST), passed by Congress on December 3rd, is only about transportation…think again. According to Dennis Brager, founder of the Brager Tax Law Group, a little noticed provision in this wide sweeping Act may have enormous impact on those whose taxes are delinquent.
“Individuals, who owe taxes to the IRS, may find that their passports are unavailable for travel,” says Brager. “The IRS hopes to use this draconian measure to collect delinquent taxes.”
In addition to the usual IRS penalties and interest, FAST introduces new consequence for certain taxpayers with seriously delinquent taxes. This new measure would permit the IRS to submit a list of these individuals to the Secretary of State, who are then subject to non-renewal, cancelation and restrictions on their U.S. passports.
The Act authorizes the U.S. government to revoke, deny or limit one’s U.S. passport if the person owes more than $50,000. This threshold includes all penalties and interest that may be added due to a taxpayer’s failure to satisfy a tax debt that is due. However, the tax enforcement provisions regarding the cancelation of one’s passport can only be utilized after the IRS has filed a lien or a levy against the taxpayer. Taxpayers who enter into payment agreements with the IRS can avoid having their passports revoked, but there is no guaranty that the IRS will enter into a payment agreement which an individual can afford without significant lifestyle changes. The Act became effective when signed by President Obama on December 4th.
Many individuals are likely to be affected by these harsh new penalties. However, few groups are likely to be as affected as the eight million American expatriates already grappling with FATCA and other offshore account compliance initiatives. Facing FATCA or other tax penalties and failing to address the matter immediately could lead to dire circumstances for expats due to potential passport cancelation. “While the $50,000 threshold seems as if it would be difficult to reach,” continues Brager, “penalties and interest can add up much more quickly than the average taxpayer would imagine.”
