Thousands of Americans with tax debts may be left without passports: what you need to know

At least 362 000 Americans with tax arrears will be denied the right to receive or update a US passport if they do not settle their tax debts.

Фото: Depositphotos

The law was passed at the end of 2015 of the year and entered into force in February of 2018, writes The Wall Street Journal.

According to the document, the State Department must refuse to issue or update passports, as well as to withdraw documents already issued by those taxpayers whose overdue tax arrears are more than $ 51 000.

According to the Internal Revenue Service (IRS), there are currently around 362 000 tax debtors in the United States who are subject to the law. The IRS sends their names to the State Department, they confirmed that some debtors had already been refused passports.

At the moment, the US authorities refuse to issue passports, and do not revoke documents already issued. Thus, many tax debtors with valid passports still have the opportunity to travel abroad, but they will not be able to renew their passports after their expiration date.

IRS Commissioner Mary Beth Murphy said that the law is effective: one of the debtors paid 1 a million dollars to avoid being denied a passport. As of the end of June, 220 people paid 11,5 million dollars of debts in order not to have problems with obtaining passports, another 1400 people signed agreements on installment payment of their debts.

However, tax attorney Nina Olson criticizes innovation. According to her, the IRS notifies the tax debtor of the risk of being left without a passport at about the same time that the agency reports to the State Department the name of the person demanding that he refuse to issue a passport. The lawyer believes that in this case the person does not have enough time to resolve the situation.

What you need to know about the law:

Debtors who may lose their passport: taxpayers who have “serious tax arrears” worth more than 51 000 dollars. This amount includes accrued tax, penalties, interest and penalties, but it does not include penalties for not providing information on foreign financial accounts.

Taxpayers who are not at risk: debtors who dispute the accrued arrears in the court, as well as those who have signed the installment plan to pay or have reached any other agreement with the IRS to repay the debt.

Also, taxpayers who are victims of identity theft are not at risk; bankrupt; located in an officially recognized disaster area; or serve in a combat zone.

In addition, the State Department may issue passports to debtors in case of emergencies or for humanitarian reasons.

How is the process: The IRS looks at its records in search of tax debtors subject to the law, and sends them a warning letter, while transmitting data to the Department of State.

A letter to the debtor warns that he or she will not be able to obtain or renew a passport if they do not pay the tax debt, they are also informed that the State Department has the right to revoke the passport issued to them earlier.

If the debtor then applies for a passport, the State Department holds it pending for 90 days. If during this time the debtor’s problems with the IRS are not resolved, the issuance of a passport will be refused, and the taxpayer will need to re-apply for a passport after paying off the debts.

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