Almost unnoticed, Congress is close to approving a law under which the Internal Revenue Service (IRS) will be able to revoke the passports of Americans who owe substantial unpaid taxes.
It would allow federal officials to revoke or deny passports to delinquent taxpayers who owe the Internal Revenue Service $50,000 or more.
The provision passed the Senate in February and is before the House now. Revenues it generates would be used to help fund a highway-transportation bill that extends provisions set to expire on June 30.
The measure comes on the heels of a 2011 Government Accountability Office study requested by Senate Finance Committee Chairman Max Baucus (D., Mont.) and then-ranking Republican member Charles Grassley (R., Iowa).
The GAO report found that for the year it studied—2008—the State Department issued passports to more than 224,000 citizens who owed about $6 billion in tax. Most of it was for individual income taxes, and nearly two-thirds was more than three years old.
The report also gave details of 15 cases in which passport recipients owe lots of unpaid tax.
The biggest Tax Debtor owed $46.6 million and was part-owner of a professional sports team. Another owed nearly $40 million and had traveled to 10 foreign countries in the recent past. The report said that the IRS had filed tax liens against both individuals but large amounts of tax still were uncollected.
If a taxpayer has an outstanding tax debt but can't be found, the IRS can alert Homeland Security officials to question the person on his way into the U.S. Typically, they will ask where the person is going and for how long, so the IRS can get in touch, but they can't arrest a taxpayer.
Because of the potential for abuse, people should know what's allowed and what isn't.
If you have US Tax Problems, contact the Tax Lawyers at Marini & Associates, P.A. for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms or Toll Free at 888-8TaxAid (888 882-9243).