Second Passport for US Citizens

A new proposal would authorize the US government to deny the application for new passports for US citizens. This proposal would authorize the government to deny the application for a new passport or renewal of an existing passport if an individual has $100,000 or more (indexed for inflation) of unpaid federal taxes which IRS is collecting through enforcement action. The government also could revoke a passport upon reentry into the U.S. for such individuals. We have several clients who after audit examinations; residential home short sales or residential foreclosures experience a phantom increase in their taxable income that yields huge tax debts. Now, they are either making installment payments from their wages or trying to make offers of lump sums, borrowing generally from relatives, to compromise the tax debt with the IRS. But, if they can not get their U.S. Passport renewed or apply for a passport for keeping or getting a job overseas; then how can they pay the IRS the tax liability? CONCLUSION: Yes, the language of this Act is vague and ambiguous, but worse yet is that the language is chilling when read with the initial revenue raising foundation proffered to the Joint Select Committee. Therefore, this language will completely eliminate the double tax relief in more than 65 international treaties. I can definitely see that other countries will quickly pass American’s interests for international trade, economy and job growth. Who will hire the American employees for international assignments when the taxes are basically double for an American employees who has no right to a passport or renewing a passport to keep an overseas job with an American or non-American employer? We are entering an era similar to the Clinton era when he vowed to tax only the rich and then worried that even semi-wealthy American would give up their U.S. citizenship to shed such an overwhelming economic/tax burden. Clinton even went so far as to have new legislation passed to make the act of relinquishing U.S. citizenship more financially costly in hope to dissuade expatriatism, which is a brain and economic drain on America. A second passport may be the norm for Americans wanting to live and/or work overseas.