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Proposed bill would put taxpayers' passports at stake

A proposed Congressional bill would allow for the IRS to limit, revoke or deny a passport in the event an individual owes "seriously delinquent tax debt" of more than $50,000. This debt can include interest and penalties tacked on to one's tax bill.

This provision will go into effect at the beginning of the year should it be passed into law. Taxpayers may still have a number of options should this proposal be passed, however. The State Department could issue exceptions should a tax bill be contested or other arrangements with the IRS are made. And seizure of one's passport would only take place if the IRS has already filed a lien or levy.

As this newly proposed bill demonstrates, it appears federal officials are also seeking other means to punish taxpayers for being behind on their taxes. Back taxes and tax debt already results in great difficulty for taxpayers. The inability to pay such taxes can result in additional penalties and interest only making one's circumstances worse. The amount owed possibly can increase disproportionately if the matter is not timely resolved. While paying off what one can afford sometimes reduces the amounts of penalties and interest, this will likely only provide limited benefit so long as tax debt remains unpaid.

It's almost never a good idea to negotiate with the IRS on one's own. The negotiation process is generally complex and could result in concessions a taxpayer can ill afford. For this reason, tax representation from an experienced attorney often goes a long way in reducing the amount of penalties and debt. Tax attorneys can provide representation at any audit or hearing. Attorneys can assist in filing of amended returns and help put all paperwork in order. They can also provide advice and counsel that will help reduce one's tax burden in the future.

Proposals of such harsh measures will likely continue due to the federal government looking for new ways to increase revenue. However, using such a justification to crack down on delinquent tax debt will not make life any easier for tax-strapped individuals.

Source: Newser, "Tax Dodgers: Feds Could Soon Snatch Your Passport," Jenn Gidman, Nov. 29, 2015

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