Expats Worried over Passports Being Revoked for Tax Debts

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An advocacy group for U.S. expatriates, American Citizens Abroad, is sounding the alarm about a provision in Congress’s highway funding bill that would revoke the passports of people who owe more than $50,000 in taxes.

The House and Senate have passed differing versions of the highway funding bill, and the two versions have yet to be reconciled. However, a provision in both versions would authorize the federal government to deny the application for a passport when an individual has more than $50,000 (indexed for inflation) of unpaid federal taxes which the IRS is collecting through enforcement action. It would also permit the federal government to revoke a passport for such individuals.

Before revocation, however, the federal government would be allowed to limit a previously issued passport only for return travel to the United States or to issue a limited passport that only permits return travel to the United States. The provision would be effective on Jan. 1, 2016, and is estimated to raise $398 million over 10 years, according to a description from the Senate Finance Committee.

American Citizens Abroad wrote a letter to congressional leaders last week to strongly oppose the inclusion of the passport revocation provision in the legislation. The group is urging Congress not to act on the provision until it has held hearings and explored alternative ways to solve any perceived tax collection problems. 

“This provision creates a tax collection mechanism that is frankly far too draconian,” wrote executive director Marylouise Serrano. “This approach puts disproportionate pressure on the taxpayer and risks mistakes and unforeseeable consequences, which would be life-changing for the individual. It discriminates against Americans abroad who, unlike Americans living in the U.S., are overwhelmingly reliant upon their U.S. passports in their everyday lives.”

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