US expats - pay your taxes or lose your passport

[Eff1n2ret]

The Wall Street Journal and Fortune Magazine have published articles stating that Congress is set to enact a law that would deny or revoke passports for taxpayers who owe the US government more than $50,000.

For some reason I am unable to cut and paste the articles, but doubtless those who are interested can find it for themselves.

[impulse]

Reading some of the horror stories from folks who went in to renew a passport or add pages and got a shocker at the embassies, I thought they'd been doing that for years.

Is this something new, or was there more to their stories than they let on?

[OJAS]

Would not surprise me in the slightest if the jolly old taxman at HMRC were, sooner rather than later, to press for similar measures to be introduced for defaulting UK taxpayers!

[Jonathan Fairfield]

Americans: Pay Your Taxes--Or Lose Your Passport

By LAURA SAUNDERS

U.S. government will be able to deny new passports or revoke ones held by people with serious tax debts

Congress is poised to enact a law denying or revoking passports for U.S. citizens who haven’t paid their taxes.

Under a new law expected to take effect in January, the State Department will block Americans with “seriously delinquent” tax debt from receiving new passports and will be allowed to rescind existing passports of people who fall into that category.

The list of affected taxpayers will be compiled by the Internal Revenue Service using a threshold of $50,000 of unpaid federal taxes, including penalties and interest, which would be adjusted for inflation.

The rule has been passed in similar versions by both the House of Representatives and the Senate. It is part of a highway-funding bill, H.R. 22, that is before a conference committee.

Congress is expected to pass it in early December.

Full story: http://www.wsj.com/articles/americans-pay-your-taxes-or-lose-your-passport-1447971424

-- The Wall Street Journal

[Eff1n2ret]

Would not surprise me in the slightest if the jolly old taxman at HMRC were, sooner rather than later, to press for similar measures to be introduced for defaulting UK taxpayers!

I wouldn't disagree if they did, but they don't seem able to withdraw the passports of terrorists who want to travel to and from Syria (or travel anywhere for that matter - what about the people who went to Pakistan for "holidays" and were rounded up in Afghanistan?). A few tax dodgers does rather pale into insignificance.

[jmccarty]

Blood sucking US taxman, no other country taxes their citizens when they are not resident in their country!

[catterwell]

Any wise US national should be actively seeking an alternative passport and moving any assets out of jurisdiction, prior to applying to revoke US nationality (which is getting harder to do).

[dutchisaan]

Blood sucking US taxman, no other country taxes their citizens when they are not resident in their country!

Oh man, how wrong you are! I'm Dutch, live in Thailand for almost 10 years and still have to pay taxes.

So check things out before you post.

[Linky]

I think quite a few would be happy to lose their passport to stop paying taxes. Even give up citizenship is made difficult by the US govt.

I cannot understand people who want to be US citizens, its like the Hotel California.

[lopburi3]

Reading some of the horror stories from folks who went in to renew a passport or add pages and got a shocker at the embassies, I thought they'd been doing that for years.

Is this something new, or was there more to their stories than they let on?

It might help if you explained what you are talking about. But suspect it may be those having court ordered support outstanding non-payment issues? State Department has been required to take action on such warrants for several years now.

[catterwell]

Here's what Simon Black has to say:

Sometimes you just have to stand in awe at the level of corruption and incompetence in government.

Case in point, the new highway bill in the Land of the Free. And, trust me, you’ll love this.

The latest version of the highway bill is called the “Developing a Reliable and Innovative Vision for the Economy Act.”

And yes, they abbreviate it as the DRIVE Act.

I cannot even begin to imagine how large the team of monkeys is that works on these silly acronyms. And as is typical for legislation, the more high sounding the name of the law, the more destructive its consequences.

On the surface, the DRIVE Act aims to fund the federal transportation network and investments in highway infrastructure for the next several years, as well as recapitalize the Highway Trust Fund.

Federal trust funds are supposed to responsibly and conservatively manage money that has been set aside for a specific purpose to benefit taxpayers.

There are so many of these trust funds. There are the big ones like Social Security’s “Old Age Survivor’s Insurance” and “Disability Insurance” (which is literally days away from running out of money).

And there are many more you’ve probably never heard about, like the “Black Lung” trust fund and the “Leaking Underground Storage Tank” trust fund.

Most of these funds are insolvent, or at least pitifully undercapitalized, clearly proving the government to be one of the worst asset managers in history.

The Highway Trust Fund is no exception: it has completely run out of money, and at this point literally has a ZERO account balance. The DRIVE Act intends to fix that.

And even though it has nothing to do with funding highways, the bill also aims to re-authorize the Export-Import Bank.

The Ex-Im Bank was created during the Great Depression and is designed to facilitate trade. That’s code for ‘boost the profits of Boeing and General Electric.’

Even the government’s own Congressional Research Service found that “more than 60% of Ex-Im Bank’s loan guarantees, by dollar value, supported the sale of Boeing airplanes in foreign countries”.

Ex-Im is essentially a gift on a golden platter from the taxpayers of the United States to a handful of mega-companies.

The Bank’s charter lapsed earlier this year. But rather than let it die, they’re jumpstarting Ex-Im with even more taxpayer money.

Clearly the government needs cash. They need to fund Ex-Im, the Highway Trust Fund, and all the improvements for America’s dilapidated infrastructure.

And their solutions to address this cash crunch are nothing short of remarkable.

For example, they plan to steal $300 million from the Leaking Underground Storage Tank trust fund (LUST… yes, that’s really what they call it), and transfer that money to the Highway Fund.

The only problem is that LUST is insolvent. So they’re stealing from one insolvent trust to fund another insolvent trust. It’s genius!

One of my favorite sections in the bill is a directive to sell off 100+ million barrels of oil from the Strategic Petroleum Reserve.

Only a politician could think to sell off oil supplies at a time when oil price is at multi-year lows.

(It also really gives you a sense of how broke the government really is that they’re driven raise cash by selling off strategic assets.)

Another gem buried in the 864 pages of the bill is a provision that allows the government to revoke your passport if they believe that you owe more than $50,000 in federal tax.

There will be no judicial review, and no due process. You don’t get to go in front of a judge first to have a fair and impartial hearing over whether or not the government’s tax allegations are accurate.

The language in the law is very clear: they can simply revoke your passport if you owe them money in their sole discretion.

Once the law is passed, this would go into effect on January 1, 2016, and they claim it will generate $40 million per year in tax revenue.

There was one more provision that proposed raising revenue from the biggest banks in America by reducing the dividend they receive from the Federal Reserve.

Curiously, though, this specific provision was defeated yesterday after a heated committee meeting in Congress.

So while the banks’ profits are off-limits, and the government will spend billions of taxpayer dollars to boost profits at Boeing, American citizens are threatened with having their passports revoked in order to raise money.

It couldn’t be any more obvious how much the system is stacked against the little guy.

They treat you like a dairy cow that exists only to be milked dry… like a medieval serf tied to the land and forced to serve his overlords.

It’s revolting. But it doesn’t have to be this way.

You can take sensible, rational steps to divorce yourself from this madness, or at least have a Plan B to protect yourself from it.

If the government is threatening to take away your passport, for example, there are countless ways you can obtain another one from a country that will roll out the red carpet for you.

If you’re sick and tired of having your income confiscated so that you can bail out big companies, there are completely legal steps you can take to reduce what you owe.

It’s hard to imagine you’ll be worse off being more free and having more control over your life and finances.

[zaphod reborn]

Typical overreaching government scheme. It won't pass constitutional muster without being amended. In order to meet basic due process requirements, there has to be a hearing on whether money is owed to the IRS. Typically, the IRS just files a tax lien with no due process hearing. That's not going to be sufficient to revoke a passport, over which the owner has a property right (5th amendment). Contrary to popular belief, the government does not own your passport. Just like a driver's license, it can't be revoked without the right of a hearing.

[shirtless]

Meanwhile corporations get away with paying nothing so they come down on the easiest targets, us the taxpayer

[impulse]

Reading some of the horror stories from folks who went in to renew a passport or add pages and got a shocker at the embassies, I thought they'd been doing that for years.

Is this something new, or was there more to their stories than they let on?

It might help if you explained what you are talking about. But suspect it may be those having court ordered support outstanding non-payment issues? State Department has been required to take action on such warrants for several years now.

My confusion was that I heard (Blogs here and in China) of some guys who claimed they went in to renew a passport, or get pages added and were declined because of outstanding tax issues. So I thought this was old news. (I figured there was always the possibility they got declined on outstanding warrants or other issues that wouldn't have sounded as sympathetic as IRS problems, but then I read this thread today.)

I actually had a scare when I renewed my passport a few years back. The agency I hired to do it came back and told me I'd have to clear up my child support issues before they could pick up my new passport. Which was surprising because I don't have kids. Next day, I got a call from them and they told me there had been an error, and I could pick up my new passport.

[AhFarangJa]

Blood sucking US taxman, no other country taxes their citizens when they are not resident in their country!

An Aussie friend of mine told me yesterday that the bank is taking 10% of his interest return on his savings as he is not resident in Australia. His bank was ordered to by the taxman. He did give me a name for it but it escapes me at the moment.

[khwaibah]

Reading some of the horror stories from folks who went in to renew a passport or add pages and got a shocker at the embassies, I thought they'd been doing that for years.

Is this something new, or was there more to their stories than they let on?

It might help if you explained what you are talking about. But suspect it may be those having court ordered support outstanding non-payment issues? State Department has been required to take action on such warrants for several years now.

My confusion was that I heard (Blogs here and in China) of some guys who claimed they went in to renew a passport, or get pages added and were declined because of outstanding tax issues. So I thought this was old news. (I figured there was always the possibility they got declined on outstanding warrants or other issues that wouldn't have sounded as sympathetic as IRS problems, but then I read this thread today.)

I actually had a scare when I renewed my passport a few years back. The agency I hired to do it came back and told me I'd have to clear up my child support issues before they could pick up my new passport. Which was surprising because I don't have kids. Next day, I got a call from them and they told me there had been an error, and I could pick up my new passport.

The US State Department has been busting child support dodgers sense 1995. I personally know of 6 that are not overseas any more for this reason. That law was signed into effect by President Clinton. The same will have to be done if the US Congress passes a bill on this and I would expect that the Whit House will go along and sign it to law.

[Lee4Life]

So what happens if they revoke your passport when you are out of country?

[DoctorG]

Blood sucking US taxman, no other country taxes their citizens when they are not resident in their country!

An Aussie friend of mine told me yesterday that the bank is taking 10% of his interest return on his savings as he is not resident in Australia. His bank was ordered to by the taxman. He did give me a name for it but it escapes me at the moment.

Withholding Tax.

Only applies to his Aus earnings, unlike USA which, I believe, can tax your foreign earnings as well.

[ubonjoe]

So what happens if they revoke your passport when you are out of country?

Issue you a travel document for a one way trip to the states.

Not sure how it will work for this new law. The ones I know of that were caught here under the child support law was when they went to the embassy to get something done. Passport renewal, pages added, notarial services and etc.

[elgordo38]

Blood sucking US taxman, no other country taxes their citizens when they are not resident in their country!

Newsflash

They all do and you pay more in taxes abroad and get no benefits vs being in your home country with benefits. In my country it is a loss of benefits mostly medical and 15% more in taxes they want their money upfront. Being a retiree does not give you any golden opportunities only the shaft of the gold mine up your wazoo. You worked all your life and paid taxes and now that you want to leave the country and they help you leave with a kick in your financial posterior. Wake up folks government is not on your side!!!! they are only on the side of the banksters, super rich and fellow politicians. Your only chafe blowing in the wind used up and spent.

[roquefort]

Blood sucking US taxman, no other country taxes their citizens when they are not resident in their country!

An Aussie friend of mine told me yesterday that the bank is taking 10% of his interest return on his savings as he is not resident in Australia. His bank was ordered to by the taxman. He did give me a name for it but it escapes me at the moment.

It's called withholding tax. Pretty much every country in the western world applies it to interest income paid from their country to non-residents. You can deduct it from any tax you pay in your country of residence if both countries have signed a double tax treaty.

[Guitar God]

You don't even have to be a citizen to owe the Dutch government taxes on worldwide income.

I only have a residence permit and I'm still obligated to file and pay taxes on anything I make in the U.S. , The Netherlands, Thailand or anywhere else.

Blood sucking US taxman, no other country taxes their citizens when they are not resident in their country!

Oh man, how wrong you are! I'm Dutch, live in Thailand for almost 10 years and still have to pay taxes.

So check things out before you post.

[mcfish]

So what happens if they revoke your passport when you are out of country?

Taxi from the airport to the embassy?

[roquefort]

Blood sucking US taxman, no other country taxes their citizens when they are not resident in their country!

Oh man, how wrong you are! I'm Dutch, live in Thailand for almost 10 years and still have to pay taxes.

So check things out before you post.

I think he means that no other country taxes its citizens on all their worldwide income, wherever they live. If you are non resident most countries only tax you on income arising in their country.

US citizens are tax slaves, to be milked by their government with no means of escape, other than renouncing their US citizenship which, as another poster has said, is becoming increasingly difficult. The tiny loophole is closing fast.

[NoshowJones]

Would not surprise me in the slightest if the jolly old taxman at HMRC were, sooner rather than later, to press for similar measures to be introduced for defaulting UK taxpayers!

If I had to pay every penny the taxman wanted, I would never be able to have come to Thailand once,

never mind the few times before I came for good.

[mcfish]

And this one is easy for them. Zero effort , just push a button and your traveling days are done!

[elgordo38]

Meanwhile corporations get away with paying nothing so they come down on the easiest targets, us the taxpayer

I am sorry I can only give you one like. Yes we are the low hanging fruit. Easily intimidated and frightened. I have come to the conclusion that I am now to old to frighten have at it you SOB'S

[NoshowJones]

Blood sucking US taxman, no other country taxes their citizens when they are not resident in their country!

I do not disagree with paying income tax, it's the amount. If you think your country is unfair with the

tax they want from you then don't declare it all.

[ThaiTony2]

Blood sucking US taxman, no other country taxes their citizens when they are not resident in their country!

Wrong!

http://www.nytimes.com/2015/01/08/business/international/china-starts-enforcing-tax-law-for-citizens-working-abroad.html?_r=0

[NoshowJones]

Meanwhile corporations get away with paying nothing so they come down on the easiest targets, us the taxpayer

Exactly.