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The IRS Begins Process to Cancel 260,000 Passports

Updated: Apr 16, 2019

The IRS has taken action to cancel the passports of 260,000 US citizens who owe them more than $51,000 USD in unpaid taxes or penalties. This comes after a ruling from the US Congress that allows the revocation of citizenship or residency rights to “seriously delinquent” taxpayers that have already been sent a Notice of Federal Tax Lien.

As of August 2018, section 7345 of the Internal Revenue Code allows the revocation of citizenship or residency rights to citizens that owe more than $51,000 USD to the IRS. An estimated 362,000 Americans are expected to be affected by this ruling by the end of 2018.

Although the number of passports in the process of being revoked is high, American law firm Dickinson Wright told that “there are many safeguards to those affected.” For example, the threat of getting the passport revoked is only imminent if the debtor has already been notified in writing and has not responded within 30 days.

Moreover, the ruling does not affect all debtors equally. Those living in federal disaster areas, have an instalment agreement, or have had their debt deemed uncollectable by the IRS based on specific circumstances, like bankruptcy or unemployment, do not risk getting their citizenship revoked.

David McKeegan, co-founder of Greenback Expat Tax Services, told CNBC that expats are more likely to be affected by the enforcement of this law than American citizens, since not all citizens have passports, but all expats do. However, the IRS states that travel into the USA from elsewhere will not be affected by the ruling.

Author: Ana Hernandez

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