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Fears Of Possible US Passport Revocation For Tax Debts

by Mike Godfrey, Tax-News.com, Washington

12 February 2015


American Citizens Abroad (ACA) has warned that a proposal to permit the revocation of United States passports from citizens alleged to have unpaid tax debts could be introduced into congressional legislation.

ACA noted that on two occasions in 2014, congressional committees rejected riders to bills that would have permitted the revocation of passports belonging to persons alleged to have over USD50,000 in unpaid tax liabilities, but that a similar proposal could nevertheless be brought forward and accepted at any time.

It opposed any such idea, warning that it would restrict citizens' freedom of movement and impose undue and unwarranted hardship for traveling Americans and for those living overseas, as most countries have laws against traveling without a valid travel document. The Supreme Court has also previously held that the federal Government cannot restrict a person's right of travel without due process.

In addition, it pointed out that, if American citizens are traveling at the time, they may never receive a tax notice and therefore would not be able to exercise their right to appeal it.

"Corrections to erroneous tax assessments sometimes have to be made and the actions of Internal Revenue Service collections officers are in many cases successfully challenged," it added. "Under the penalty provisions set forth in the Report of Foreign Bank and Financial Accounts (FBAR) and Foreign Account Tax Compliance Act legislation, one could easily surpass the USD50,000 minimum for simply having failed to declare two accounts over a three-year period."

ACA urged Congress to forego any consideration of such proposals. It said it is confident that it could help to shape policies "which reconcile the needs of tax collection with the imperatives of freedom and predictability for Americans traveling and living abroad."

TAGS: individuals | expatriates | compliance | tax | tax compliance | law | enforcement | legislation | United States | penalties | Compliance | Expats | Tax

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