IRS now given authority to revoke US Passports
While the world was occupied with the terrorist events in Paris and San Bernardino, a new regulation in the United States was signed into law in early December: H.R. 22 FAST (Fixing America’s Surface Transportation Act). Although it is a transportation bill intended to repair US infrastructure, tucked into the bill is section 32101.
This section of the bill gives the US Internal Revenue Service (IRS) new powers to revoke or deny US passports to US taxpayers who are “seriously delinquent” on their tax payments – amounts in excess of $50,000.
On the surface, some may think that this will not have an effect on an overseas American who remains compliant with their annual US tax filings. However, considering the complexity of the new FATCA and FBAR rules, the constant changes to tax code and the lack of IRS training provided to individuals overseas to understand their US tax obligations, mistakes can be made. The bill also grants immunity to government officials who make mistakes in who they deem to be non-compliant. Considering how crucial a US passport is for individuals in allowing them to travel for work or family reasons, the thought it could be taken away in this manner is quite worrisome.
It’s not only overseas Americans whose lives could be disrupted by this new regulation. Residents of the States of New York, New Hampshire, Louisiana and Minnesota will be required in 2016 to have a Federal ID to travel within the United States. This is due to the fact that these states have not complied with the Real ID Act that is now in place and enforced by the Transportation Security Administration at US airports.
Section 32101 of H.R. 22 was never subject to public hearings which would allow those affected to give testimony. It is another reminder that the more than six million overseas Americans need to be more coordinated and vocal about US laws and legislation which may – inadvertently or not – threaten the quality of their lives outside the United States.