US authorities have given the tax officials the power to revoke the passports of American citizens in the case of ‘seriously delinquent tax debt’, it was announced on Thursday.
Under new rules, American citizens too could soon be banned from travelling by having their passports revoked for unpaid taxes. In a statement published on the website of America’s Internal Revenue Service on Thursday, ‘seriously delinquent tax debt’ was classified as an individual’s unpaid, legally enforceable federal tax debt totalling more than $50,000. It added that it would only be if all administrative remedies under IRC § 6320 have lapsed or been exhausted, or a levy has been issued.
If this is the case, the IRS would now have the ability to revoke the passport of a US citizen.
The announcement comes just weeks after President Donald Trump initiated a controversial immigration ban, denying entry to the US to citizens of seven predominantly Muslim countries. This included those with valid visas.
Nigel Green, founder and CEO of deVere Group, commented on the announcement:
“This latest move would likely affect Americans living abroad most acutely for two reasons.
“First, because they would typically use their passports more often – not only for travel but for administrative matters, such as rental contracts, in their countries of residence.
“And second, since the worldwide rollout of the highly controversial Foreign Account Tax Compliance Act, or FATCA, in 2014, tax returns have become more complex, onerous and burdensome for U.S. expats due to additional reporting requirements.
“Indeed, in our experience of working with U.S. citizens who live abroad, 35 per cent are now likely to make a mistake on their tax return and/or file late due to the new complexities.
Mr Green concluded:”“For U.S. citizens who are resident overseas, the IRS’ latest weapon to collect taxes, means it is more important than ever to stay on top of your taxes and file on time and correctly.”