Americans Overseas Voice Strong Opposition to Link between IRS Claim of Back Taxes and Revocation of US Passports in Senate Transportation Bill

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American Citizens Abroad (ACA), a worldwide organization of American citizens living overseas, has sent an ACA Position Paper to Congressional members working on the Surface Transportation Bill, to oppose the tax revenue provision allowing the IRS to revoke U.S. passports if they consider that the individual owes back taxes of more than $50,000. This revocation would last as long as the tax claim was unresolved. ACA emphasizes that Americans overseas have a much more complicated process of declaring US taxes, and therefore the possibility of making mistakes is greater than for those in the US. In addition, this provision would cause considerable discrimination against Americans living and working abroad, who often need their passport as an identity paper on a daily basis.

American Citizens Abroad (ACA) has written a letter to members of Congress to express strong opposition to the enactment of a provision of the Senate Surface Transportation Bill (S.1813 - Moving Ahead for Progress in the 21st Century Act), which is being worked on by a Congressional Conference Committee. The contested provision would authorize the U.S. Government to revoke or deny renewal of a passport when the individual in question has $50,000 or more of unpaid federal taxes, which the IRS is trying to collect through enforcement actions. ACA sent the letter to Senator Barbara Boxer (D-CA) and members of the Senate Transportation Committee, the Senate Finance Committee and the House Ways and Means Committee.

In its letter, American Citizens Abroad asks that the conferees strike this provision from the transportation bill. Marylouise Serrato, ACA Executive Director, stated, “this provision creates a tax-collection mechanism that is frankly far too draconian. It discriminates against Americans abroad who, unlike Americans living in the US, are overwhelmingly reliant upon their US passports in their everyday lives.”

ACA also points out in the letter that a recent GAO Study (GAO-11-272 Passport Issuance, March 2012) noted that the constitutional, policy and practical issues involved have not been carefully studied, and this must be done as a first step, before enactment of a measure which would have such extreme effects on U.S. citizens living overseas.

ACA knows from its members worldwide that the tax rules for Americans outside the US are extremely complex, and it is easy for the taxpayer living overseas to make a mistake or overlook a detail. If made, mistakes commonly affect more than one or two years of declarations, and, therefore, the amount that the IRS claims is owed can be significant. Communications with the IRS about a tax liability are more difficult for Americans living overseas for many reasons, including the greater complexity of the tax code, unreliable mail service, difficulty in speaking directly to IRS agents from abroad, confusion over IRS letters and forms, and the use of currency exchange rates.

Americans living outside the US, especially if they have no other nationality, use their passport every day, just to go about their lives. If the IRS claims they owe more than $50,000, and therefore their passport were to be revoked, they could not travel anywhere outside their country of residence and could not perform many every-day tasks that require identification.

Serrato emphasized, “individual Americans overseas should not have to pay an extreme price to improve the IRS’s tax collection procedures”.

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MaryLouise Serrato
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