Can you take a trip overseas if you owe the IRS a boatload of back taxes? Not if new legislation passed by the Senate is signed into law.
The bill, known as the Trade Facilitation and Trade Enforcement Act of 2015 (S. 1269), was approved by a 78-20 vote on May 14. This legislation, which was introduced by Senate Finance Committee Chairman Orrin Hatch (R-UT), includes amendments to the tax code that would allow authorities to revoke or deny the passport of any US taxpayer who has unpaid taxes in excess of $50,000, or who hasn’t obtained or won’t provide a Social Security number.
The concept is hardly new. Proposals tying passports to tax liability have been kicked around the halls of Congress for several years. Back in 2012, current Senate Minority Leader Harry Reid (D-NV) proposed that passports should not be issued to taxpayers who owed the IRS more than $50,000. In 2014, influential Sen. Ron Wyden (D-OR) supported a measure – the Moving Ahead for Progress in the 21st Century Act (MAP-21) – that would allow your passport to be revoked if you owed the IRS more than $50,000 and the IRS had filed a notice of lien.
A notice of lien can be filed after:
The IRS assesses the tax liability.
The agency sends you a notice and demand for payment stating the amount of your liability.
You fail to pay the full amount within 10 days.
Although it is easy to pile up unpaid tax liability, including interest and penalties, the $50,000 threshold is relatively high. In comparison, passports may be denied or revoked under existing law if you owe only $2,500 in child support payments.
Nevertheless, the crackdown in the new fast-track legislation is drawing fire in some circles. It has been argued that this is an illegal infringement on a US citizen’s right to travel and is unconstitutional. Others fear that this provision could result in administrative nightmares and glitches that could hold up lines at airports.
The Hill has expressed doubts that this bill will ever make it to President Obama’s desk. We will keep an eye out for any significant developments.
Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a...