The IRS has the power to put liens on your property and even seize it outright, garnish your wages and do other things to those it accuses of owing back income taxes. Soon, it will also be able to limit your ability to travel.
Fortune reports that, starting in January, the new federal highway funding bill will take effect. Part of the new law empowers the IRS to deny or revoke the passport of any taxpayer who allegedly owes more than $50,000 in taxes. One estimate expects that this new tactic will generate $398 million in unpaid taxes over the next 10 years.
Not only would this make leaving the country impossible for many Americans, it could affect the status of U.S. citizens currently living abroad. The IRS reportedly sent 855,000 notices to citizens overseas in 2014, so the number of people facing immigration issues could be significant.
Even for people living in the U.S. and with no plans to travel or work abroad, losing their passport could be a major inconvenience. An attorney who advises American expatriates said that many people use their passport as identification at the bank, registering their children at school and so forth.
Having a delinquent tax debt of $50,000 is stressful enough without having to worry about an IRS agent seizing your passport. Fortunately, a tax attorney may be able to help, whether by contesting the bill, negotiating a settlement or other solution. Dealing with the IRS on your own can be scary and confusing, but an attorney can advise you and defend your rights.