America is one of several countries that use creative methods to get what they are owed in unpaid back taxes. Fortunately the cut off is a fairly high number that most people won’t get to for several years even if they completely neglect to do any tax reporting at all. Unlike some other countries the IRS is notifying people who are in danger of being denied a new passport, a renewal, or simply having a current passport revoked.
The IRS is finally ready to make good on threats to strip U.S. passports from Americans who owe more than $52,000 in overdue taxes.
The tax collector and the State Department are escalating enforcement of the Fixing America’s Surface Transportation (FAST) Act. This law enables them to deny passport applications or revoke existing passports due to outstanding debts.
The enforcement effort, which began in February 2018 for debts of $51,000 and higher, has thus far covered applications for new or renewed passports. (The higher threshold of $52,000 for 2019 reflects an annual adjustment for inflation, although the IRS could not confirm.)
Now, the IRS will actively begin referring unresolved cases to the State Department for potential revocation, IRS spokeswoman Cecilia Barreda told CNBC.
The State Department denies passport applications or revokes existing passports based on the information it receives from the IRS. The $52,000 must qualify as legally enforceable federal tax debt, including interest and penalties, according to the IRS.