Proposal Revoking US Passports For Tax Debts Attacked

by Mike Godfrey, Tax-News.com, Washington

11 November 2015

American Citizens Abroad (ACA) has written to US Congressional leaders strongly opposing the inclusion of a passport revocation provision to fund part of the proposed highway funding bill.

The provision would authorize the federal government to deny an application for a passport from an individual that has more than USD50,000 (indexed for inflation) of unpaid federal taxes that the Internal Revenue Service (IRS) is seeking to collect through enforcement action. It would also permit the federal Government to revoke a passport for such individuals. Before revocation, the use of a previously issued passport would be limited to return travel to the United States.

Versions of a part-funded six-year bill to replenish the Highway Trust Fund have been passed by the US Senate and House of Representatives and are due before a conference committee later this month to try and resolve their differences. If the bill is approved, the passport revocation provision, which is estimated to raise only around USD400m over 10 years, would be effective from January 1, 2016.

However, in a November 6 letter, the ACA urged Congress not to act on this provision until it has held hearings and explored alternative ways to solve any perceived tax collection problems. ACA's Executive Director Marylouise Serrato wrote that the provision would be "far too draconian" and "risks mistakes and unforeseeable consequences."

"[This provision] discriminates against Americans abroad who, unlike Americans living in the United States, are overwhelmingly reliant on their US passports in their everyday lives," she said, adding that the IRS's ability to help taxpayers living overseas has become particularly limited due to the closure of some IRS offices abroad.

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