In a radical move aimed at enforcing tax compliance, the IRS will soon be denying passports or revoking existing ones, of Americans who fall behind on their tax payments, resulting in huge tax debts, according to Fox News reports. The move follows legislation passed by Congress as part of a crackdown targetting chronic tax delinquents. Last month, the IRS announced it would begin implementing procedures to ensure that those with "serious" tax debts are forced to pay up. The American passports to be targeted, according to the IRS, are for those owing more than $51,000 in back taxes, interest, and penalties, and those that have been issued with a filed notice or levy, where the period to challenge the notice has expired.
IRS and the State Department
A 2015 legislation known as Fixing America's Surface Transportation Act, will be used to enforce the passport denial or revocation of those with huge tax debts. In the Act, the IRS will inform the State Department of the tax debt culprits, which will, in turn, deny passport applications or renewal to those mentioned. Passports that are also in use can be revoked by the State Department. Americans who provide incorrect or invalid Social Security numbers will not be spared either, according to the new guidelines, as their passports will also be revoked. A State Department spokesman confirmed the new measures to Fox News.
Freedom of travel
According to the director of tax policy studies at the Cato Institute, Chris Edwards, if the new measures are implemented, the government will be infringing on a basic right of freedom to travel.
Edwards is also concerned about the possibility of personal information leaking to other government agencies and being easily accessible to hackers if the IRS goes ahead with its plans. Kevin Williamson of the National Review, on the other hand, called on Congress to undo the legislation, terming the new measures as harsh and "totalitarian."
To avoid denial or revocation of their passports, the IRS offers two options to tax defaulters; to pay their tax debt in full, or agree to a signed payment plan.
The only exemptions to the new measures will be for those declared bankrupt, serving in combat zones, or situations where the debt cannot be collected due to hardships.
Also, the State Department spokesman pointed out, that limited validity passports can be issued to tax defaulters on humanitarian or emergency grounds. According to the Taxpayer Advocate Service, the only other scenario where an American can be denied or have their passport revoked is if they fail to pay child support, courtesy of a 1996 law.