(Newswire.net— July 7, 2018) — The Internal Revenue Service (IRS) may start implementing a law from 2015 allowing authorities to revoke and deny passports to those owing over $51,000 in unpaid taxes, the Wall Street Journal reported on Friday.
An IRS representative told the newspaper that authorities have currently only denied passport applications to those in debt and have not yet started revoking existing travel documents.
The Fixing America’s Surface Transportation (FAST) Act, which became law in December 2015, may hit more than 362,000 US citizens whose debt is over $51,000. The law allows the IRS and State Department to revoke passports or deny issuing a passport to those who want to renew it or apply for the travel document for the first time.
Although the IRS representative told the Wall Street journal that authorities are not yet implementing the full scale of the law, he said that the process of alerting the State Department about individuals with outstanding debts should be completed by the end of the year.
The IRS Division Commissioner Mary Beth Murphy told WSJ that the law is delivering results as some 220 people reacted instantly and paid their debts, pouring some $11.5 million into the federal budget.
The sum of debt includes interest, penalties and assessed tax so citizens should check with the IRS regarding the total amount of debt to avoid unpleasant surprises, the IRS representative warned.
The law is strict but allows exemptions in some cases. For example, a taxpayer is not subjected to the law if he or she is disputing the debt assessment in court or is about to settle the issue with IRS through compromise. Also, the law would not be implemented to those who are in distress, declared bankruptcy or a victim of federally declared disasters. However, people in this category are unlikely to travel abroad anyway.
The rule would also spare victims of identity theft and members of the armed forces, but only those who were deployed into combat. Citizens who are already outside the US would also be exempt from the law so they can return and settle the debt with the IRS.
Critics of the law argue that it is overzealous. They claim that instant implementation is leaving taxpayers, who are willing to clear their debts, with far too little time to do so.
At the moment, the IRS sends the indebted taxpayer a letter, notifying them that their passport will not be issued because of overdue debts, at the same time it alerts the State Department, leaving insufficient time for taxpayer to react.
The State Department, however, holds the passport application or renewal open for 90 days to allow for the resolving of any errors, making a full payment, or entering a satisfactory payment plan.