Homeless in Arizona

Don't pay your taxes?? Uncle Sams goons at the IRS will revoke your passport.

Who says American isn't the worlds largest police state.

For some reason I suspect that U.S. Congresswoman Kyrsten Sinema was behind this law. I don't think U.S. Congresswoman Kyrsten Sinema has ever seen a tax she didn't LOVE.

U.S. Congresswoman Kyrsten Sinema tried to screw marijuana smokers when she was a member of the Arizona legislator and tried to pass a 300%, $900 an ounce tax on medical marijuana for her police buddies.

Why owing a lot of taxes could ruin your travel abroad

Russ Wiles, The Republic | azcentral.com 9:50 a.m. MST December 18, 2015

A new law authorizes the government to revoke passports for people owing $50,000-plus in back taxes

It's unclear how many of the roughly 126 million Americans with passports would be affected Another provision authorizes private debt collectors, rather than the IRS, to pursue some tax debts

It might be wise to pay your overdue income taxes before packing for that European river cruise.

A new enforcement provision passed by Congress and signed into law earlier this month allows the government to revoke the passports of seriously delinquent tax scofflaws — people who owe more than $50,000 to Uncle Sam.

"You could be on your honeymoon and they could revoke your passport," said Tom Wheelwright, a certified public accountant and chief executive officer at ProVision Wealth Strategists in Tempe.

Some details still need to be worked out, and it's unclear how many of the 126 million holders of valid U.S. passports might run afoul of this law. Probably only a small slice, based on modest revenue projections from congressional researchers.

But the new passport rule does indicate the government wants to get serious about collecting unpaid tax debts from individuals. Or more accurately, it reveals policy inconsistency coming out of Washington, as it corresponds with budget cuts mandated by Congress that have impeded the ability of the Internal Revenue Service to enforce the laws and go after tax cheats.

For example, the headcount of IRS criminal investigators has dropped to slightly more than half the level of a decade ago, as the audit rate for individual taxpayers has dipped below 0.9 percent. Meanwhile, efforts to combat tax-related identity theft are soaking up more of the agency's time and resources, with about one in five IRS manpower hours now devoted to problems tied to the theft or attempted theft of taxpayer refunds. That's in addition to requirements that the IRS now enforce provisions of the Affordable Care Act — a responsibility it didn't have a few years ago.

The FAST Act highway-transportation bill signed by President Obama Dec. 4 also included a mandate that the IRS turn over certain unpaid tax delinquencies to private debt collectors. The IRS didn't want outside collectors to be authorized, so this provision was a "slap in the face" for the agency, said Mark Luscombe, principal federal tax analyst at researcher Wolters Kluwers in suburban Chicago.

The passport-revoking provision allows the Department of the Treasury and the IRS to authorize the State Department to take away U.S. passports from individuals who owe more than $50,000. Affected taxpayers would receive written notice.

Seriously delinquent tax liabilities are those that have been assessed and are greater than $50,000 and for which the IRS has filed a lien or levy, according to Matthew D. Lee of law firm Blank Rome. In a blog, he described the passport-revoking provision as a "powerful tool to force tax compliance."

The State Department is now authorized to deny, revoke or limit use of a taxpayer's U.S. passport, and it isn't supposed to issue a passport to anyone owing that much money (with exceptions for emergencies or for humanitarian reasons). Americans out of the country when their passports are revoked may be allowed to return home.

The number of valid U.S. passports has surged in recent years, from roughly 30 million in 1995, climbing to 65 million in 2005 and then to 126 million this year.

The new provisions wouldn't affect taxpayers who already have entered deals with the IRS to pay their tax debts, such as installment agreements or offers in compromise. Also, passports wouldn't be revoked for people who are seeking hearings or who are claiming innocent-spouse relief, according to Lee. Taxpayers who pay their bills, enter into installment agreements or otherwise reach a deal with the IRS would have their passports returned, if they were revoked.

Wheelwright views the $50,000 limit as low, adding that it wouldn't take much to accumulate that much debt if a person lost a job, incurred big medical bills or so on. It doesn't help that it's getting more difficult for people to contact the IRS, which is answering only about 40 percent of telephone calls from taxpayers, he said. Even tax professionals are looking at average phone waits of about 90 minutes, he said.

On the other hand, many of the people likely to get their passports revoked have been ignoring their tax obligations. An individual typically would receive three or four IRS notices over three to six months before getting to the collections stage, Wheelwright said.

Luscombe at Wolters Kluwers said many of the people with severely delinquent accounts are U.S. citizens who live in other nations. Some have dual citizenship and might not worry about losing their U.S. passports. "They feel they can ignore a tax problem for a while," he said, adding that communicating with the IRS is even tougher for people living outside the country.

The IRS reported 12.4 million delinquent accounts owing nearly $131 billion in assessed taxes, interest and penalties in 2014. An IRS spokesman said the agency is reviewing the new law and taking steps to implement the program "as soon as feasible."

Congressional analysts expect the passport-revocation rule to raise about $400 million over the next 10 years, presumably as some people with delinquent accounts decide to pay up, Luscombe said. That's less than the expected revenue from the new rule mandating non-IRS debt collectors. That's expected to bring in $4.8 billion total over the next 10 years, or around $2.4 billion after private collectors take their share, Luscombe said.

Private debt collectors would be called in on "inactive" tax delinquencies. "This means that the IRS has already tried to collect and failed because they couldn’t locate the taxpayer or they deemed it not worth their time," Wheelwright said, adding that only those tax liabilities outstanding more than a year would be outsourced. The new rule carves out various debt-collecting exceptions, such as for minors with big tax bills as well as innocent spouses and military personnel in combat zones.

Reach Wiles at russ.wiles@arizonarepublic.com or 602-444-8616.