A new bill just passed in the Senate is known as the “Moving Ahead For Progress In The 21st Century Act” or “The Highway Bill” for short is infamous in the media right now for its impact on vehicles. The bill would make it mandatory for individuals to have black boxes attached to their cars. Also attached to the end of the bill is a provision that will have a great impact on taxpayers who owe the IRS tax debts.
In Section 40304 is an addendum to the current tax code that makes it legal for the IRS to revoke U.S. citizen’s passports when they owe a substantial amount of tax debt. Seriously delinquent taxpayers who owe over $50,000 will have their names submitted to the Secretary of State for a revocation of their passport status. Also included in the new law are any taxpayers who have been issued a notice of lien or notice of levy. This means that receiving a tax lien will not just ruin your credit score, but soon will flag your ability to travel out of the country as well.
The revocation is supposed to be lifted if the taxpayer enters into an installment agreement to pay off their tax debts in a “timely manner” or if the debt is suspended due to a relief situation (such as currently non-collectible status). The bill also allows those taxpayers who have IRS tax debt to return to the United States, but not to leave the country.
The purpose of the tax code revision is intended to keep wealthy individuals that have tax debts and are basically at-risk of moving their assets and themselves to another country from getting away. The bill was introduced by Senator Barbara Boxer (D-CA) and was recently passed by the Senate, but will have more difficulty passing in the Republican controlled House. However, because of the other provisions attached to the bill, it’s expected to pass in the House; although, there is a chance that this tax code revision could be left off the passing bill. Tax liens are issued by the IRS when there is a debt amount in question, a matter is being challenged in Tax Court, there is confusion about debt or when the IRS believes the debt may be uncollectible. The IRS does not only issue tax liens to those taxpayers who have debts over $50,000, there are taxpayers who owe smaller amounts that receive notices of lien.
