Included within Senate Bill 1813 that was passed in the Senate on March 14 is a law that would give the State Department the authority to revoke, deny or limit passports for individuals who have delinquent IRS tax debts over $50,000 dollars. The bill, aiming “to reauthorize Federal-aid highway and highway safety construction programs, and for other purposes,” is one for taxpayers to keep an eye on in the coming year.
It is important to note that this would not apply in all situations. If the taxpayer is currently paying the back taxes in a timely manner, if there is an emergency or if the taxpayer is traveling for humanitarian reasons, they may be exempt from passport revocation. This is an important change, for such revocation of passports would no longer be limited to tax cases with criminal implications or situations in which the government thinks there is a possibility of taxpayer flight in the face of tax debt.
A recent article in Forbes regarding this topic gave a very succinct example of the possible implications of the bill on the average taxpayer owing over $50,000. If the bill passes, an individual’s passport could be revoked if he or she had a delinquent tax bill of $60,000 accompanied by a federal tax lien. While liens are routinely filed in the case of tax debt, this lien could prevent a taxpayer facing delinquency from traveling.
While the bill must still pass in the House of Representatives, it may still be a good idea to settle your IRS tax debts. Speak to your competent and experienced tax professional as soon as possible. This could prevent you from being “grounded” if the law passes.
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