The GOP-led Congress wants to hand the IRS the keys to your freedom.
The highway funding bill now making its way past lawmakers includes a provision that would allow the government to yank your passport if you owe the IRS more than $50,000.
As part of the 864-page H.R. 22, the Transportation Funding Act of 2015, the House Ways and Means Committee has inserted language that, if left intact, will allow the State Department to deny or revoke the passports of “seriously delinquent” taxpayers.
That means that, should you find yourself in litigation with the IRS over a big, disputed tax bill, you could be banned from leaving the country. Worse, because those who work overseas are subject to U.S. taxes on everything they earn, a revoked passport could fundamentally trap them in a very, very small world.
“This provision creates a tax-collection mechanism that is frankly far too draconian,” the American Citizens Abroad (ACA) nonprofit wrote to lawmakers earlier this month.
The law “puts disproportionate pressure on the taxpayer and risks mistakes and unforeseeable consequences, which would be life-changing for the individual. It discriminates against Americans abroad who, unlike Americans living in the U.S., are overwhelmingly reliant upon their U.S. passports in their everyday lives.”
The measure appears to be a blind stab at raising revenue.
“You may wonder what past-due taxes and passports have to do with funding transportation infrastructure,” CNN Money’s Jeanne Sahadi writes. “The answer is pretty much nothing, except that the measure is estimated to raise nearly $400 million over a decade.”
The language would target those who have had a tax lien placed against them by the IRS and would take effect on Jan. 1 of 2016. The ACA is asking lawmakers to withhold the passport language from H.R. 22 until they have held hearings.
This is not the first time Congress has attempted to link passports with taxes, and it’s an idea that apparently appeals to lawmakers from either party. Although the GOP-controlled Congress would squarely be to blame if the current language becomes a part of the law, a 2012 highway funding bill sponsored by Sen. Barbara Boxer (D-Calif.) sought the same power. The passport-taxes link in that bill was struck before Congress approved the funding package.
“A $50,000 tax debt is easy to amass today,” Rob W. Wood wrote for Forbes in February. “In addition, tax liens are pretty standard. The IRS files tax liens routinely when you owe taxes. It’s the IRS way of putting creditors on notice so the IRS eventually gets paid. In that sense, the you-can’t-travel idea seems extreme. Some commentators noted that a far smaller sum of unpaid child support can trigger similar passport action. Others attack the proposal as potentially unconstitutional.”
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