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USA to confiscate passports of tax debtors

Editorial Staff

The USA's fascination with finding names of laws that can be turned into snappy acronyms reached new levels in December 2015 when it past the FAST Act. The name, Fixing America's Surface Transportation (FAST) Act gives no hint as to what it does. It's a highly aggressive tactic against taxpayers with unsettled debt. The Act has crept up pretty much unnoticed but it is being implemented starting this month.

Who does the FAST Act apply to?

Any taxpayer who has a "seriously delinquent tax debt" - which will usually mean "someone who owes the IRS more than USD51,000 in back taxes, penalties and interest for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired or the IRS has issued a levy." In short, then, the penalties under FAST operate as an administrative procedure, without the intervention of the Courts.

If those conditions are met, the IRS is requited to notify the State Department which may take action including "denial, revocation, or limitation of a passport."

Several groups of taxpayers are not liable to the restrictions. They are anyone -

* Who is in bankruptcy
* Who is identified by the IRS as a victim of tax-related identity theft
* Whose account the IRS has determined is currently not collectible due to hardship
* Who is located within a federally declared disaster area
* Who has a request pending with the IRS for an instalment agreement
* Who has a pending offer in compromise with the IRS
* Who has an IRS accepted adjustment that will satisfy the debt in full

Serving members of the military will not be subject to notification during their deployment.

There are several ways that debtors can avoid notification:

* Paying the tax debt in full
* Paying the tax debt [in a] timely [manner] under an approved instalment agreement,
* Paying the tax debt [in a] timely [manner] under an accepted offer in compromise,
* Paying the tax debt [in a] timely [manner] under the terms of a settlement agreement with the Department of Justice,
* Having requested or have a pending collection due process appeal with a levy, or
* Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief.

Further reading: https://www.irs.gov/irb/2018-0...