Hold Your Horses-And Your Passports!

Owe back taxes and fearing the loss of your passport? Fear not, fearful passport-holders!

You may have more time than initially thought!

In 2015, Congress enacted a law that would revoke passports of American citizens who owe $50,000 or more in back taxes, and that includes penalties and interest!

However, somehow, about six months after that government provision took effect on January 1st, there are absolutely no reports of enforcement so far.

So what’s the deal-was this an empty threat? A bluff being “called” by American tax outlaws?

The reason for the delay in penalization is likely due to the fact that no regulations detailing the logistical elements of this passport take-back. At this time, the IRS and State Department are working to write such regulations.

As you might imagine, the passport provision is of special concern to Americans living abroad, due to the frequent use of their passports for routine activities of daily life, such as banking or registering children for school. Additionally, and perhaps most seriously, they also may not receive notices mailed by the IRS. Due to the severity of these repercussions, regulations are expected to build in a lot of leeway.

In general, more Americans are disclosing foreign accounts and in 2015, alone, more than 1.1 million people filed annual reports which disclosed these foreign accounts. The State Department has estimated that nearly seven million Americans live abroad, currently.

The IRS’s filing deadline for U.S. taxpayers living abroad is June 15 and as with the April due date for stateside filers, these individuals can ask for an extension until Oct. 17 simply by submitting a form. Of course, this does not apply to back taxes owed, so be aware of that!

Finally, be sure to message us at ePassportPhoto to get quick guidance from our representatives!