There’s an obscure 2015 law stating allowing the U.S. State Department to deny a passport to any American who owes the Internal Revenue Service (IRS) more than $51,000 in overdue tax debt. As a result, as many as 362,000 Americans could experience passport denial if they try to apply for or renew one — that’s roughly the entire population of Arlington, Texas’ seventh largest city.
The Wall Street Journal verified that some Americans have already been denied passports under this law, though the State Department says it hasn’t revoked any already issued passports over tax debt.
While the law may sound harsh, it’s actually working. An IRS spokesperson told The Wall Street Journal that by late June, 220 Americans had already paid off $11.5 million of their debts in full. An additional 1,400 Americans had set up payment plans to start reducing their debts through monthly installments.
Critics of the 2015 law worry that it most negatively effects poor Americans who travel internationally to visit their families and those who go on work trips abroad.
Nina Olson, head of the Office of the Taxpayer Advocate, also says that the IRS often contacts people for back-owed taxes around the same time other debtors and collection agencies come calling. Collectively, they can make it difficult for people to start paying down their debt before applying for a new or renewed passport.
Luckily, the law includes exceptions for American citizens who’ve been victims of identity theft, those who live in federally declared disaster zones as well as those claiming “innocent-spouse” relief (a special status given to people whose spouses omit key financial information from their tax forms).
What do you think of this law allowing passport denial for back-owed taxes?
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