Going Nowhere FAST if You Owe Taxes

Your Guide to State, Local, Federal, Estate + International Taxation

Tax season has come to an end and the season for travel is approaching. So as I wait for clients that are on extension to provide me some missing information, I found myself browsing tax news and articles (Exciting, I know!). Anyways, I was trying to find a blog topic to jump out at me (harder than you would think), but low and behold….I found one!

I, like most people out there, LOVE to travel, see new things, and experience different cultures, BUT did you know, that President Obama signed a transportation bill that has a provision requiring the IRS to refer “seriously delinquent taxpayers”* to the U.S. State Department for denial or revocation of a passport!? I was shocked, but at the same time, if you are a “seriously delinquent taxpayer”, you probably shouldn’t be traveling the world anyways. But what if it’s your job? … It might then pose a problem, no?

The bill is called, “Fixing America’s Surface Transportation Act” (FAST Act). Section 7345 of the bill is the new provision I am mentioning. Under the bill, the IRS submits the names or certificates of seriously delinquent taxpayers to the Secretary of the Treasury, who then passes it along to the Secretary of State who is REQUIRED to deny, revoke or limit your passport. And by limit, they really just mean if you are already out of the country on travel they will “limit” your passport so that you can come back, but not leave again.

*Seriously delinquent taxpayers are taxpayers that owe the IRS over $50,000 (updated yearly for inflation). This includes penalties, interest, etc. There are also other requirements (not discussed here) that have to be met by either you or the IRS to be considered a seriously delinquent taxpayer.

“When in Rome…” or before going to Rome… PAY your taxes! Otherwise you may going nowhere FAST (Get it?).

By Chris Morrison