Offbeat Owe back taxes? You could lose your passport

17:33  12 july  2018
17:33  12 july  2018 Source:   cbsnews.com

Hundreds of thousands at risk for passport denial because of tax debt

  Hundreds of thousands at risk for passport denial because of tax debt People with tax debt of more than $51,000 will be denied new passports until their debt is satisfied.Hundreds of thousands of Americans with unpaid tax debts will not be able to apply for or renew passports until their debts are settled, as federal officials step up enforcement of a law passed by Congress in 2015.

This includes the tax , penalties and interest, which can add up fast. A tax lien must be filed, and all administrative remedies for lien relief must have lapsed or been denied. Instead, call the National Passport Information Center at 877-487-2778 to inquire about your situation. If you owe back taxes

The provision stipulates that if you owe the Internal Revenue Service (IRS) ,000 or more in taxes and penalties, you could lose your passport – including the right to renew it See How to Negotiate Back Taxes with the IRS and Form 9465: Don’t Pay Your Back Taxes Without It. The Bottom Line.

If you're one of the several hundred thousand U.S. taxpayers who the IRS deems to have a "seriously delinquent" tax debt, be warned: Your U.S. passport may be in jeopardy.

In 2015, President Barack Obama signed into law the Fixing America's Surface Transportation Act, or FAST Act. It requires the U.S. State Department to deny renewal of -- and even revoke -- the passports of individuals who the IRS identifies as having delinquent tax debts.  

The tax agency recently provided new details on its enforcement of the FAST Act, stating it's in the process of sending the names of at least 362,000 individuals who owe $51,000 or more in delinquent taxes. According to an IRS spokesperson, it will send the names to the State Department in batches, and it expects to have sent the entire list by year-end.

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When you owe the IRS tens of thousands of dollars in past-due taxes , you can expect to owe big penalties and interest. And soon you could even lose your U.S. passport . "Their financial affairs are, typically, far more complex than their counterparts back home," said Nigel Greene in a statement.

US citizens face an ultimatum - pay taxes or lose passport ! What was once barely more than a conspiracy theory is now a reality and the law in the US - not paying your taxes could cost you your passport . If you owe more than ,000 to the IRS

According to recent reports, the enforcement actions taken to date have already had an impact. The State Department confirmed it has denied passports to an undisclosed number of tax debtors. The IRS confirmed that it has collected over $11.5 million from 220 individuals, with one debtor paying over $1 million to avoid passport denial.

The specifics of how the enforcement of the law works are spelled out in a section of the FAST Act titled Revocation or Denial of Passport in Case of Certain Tax Delinquencies. The IRS said for now authorities are denying renewal of passports rather than revoking them. But the law does allow the State Department to cancel current passports of tax debtors.

Enforcement of the law has its critics, who say that because the IRS notifies tax debtors at about the same time it sends their name to the State Department, they don't have enough time to resolve the debt and allow the IRS and the State Department to lift the passport restrictions. Critics would also like the notices the IRS sends to individuals to be clearer about situations that are exempt from the law.

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  New York and three other states claim Trump tax law is unconstitutional New York, Connecticut, Maryland and New Jersey filed a lawsuit Tuesday claiming last year's tax overhaul violated the constitution by unfairly targeting Democratic states. The law puts a new cap on how much Americans are allowed to deduct for state and local taxes, or SALT, from their federal bill. Once unlimited, the deduction is now capped at $10,000. Deductions help reduce a person's overall tax bill.The cap will disproportionately harm high-tax states and their residents, the lawsuit says. It also claims the change in SALT interferes with states' rights to make their own financial decisions.

Not paying your taxes may affect your ability to fly in the future since your passport may be yanked for noncompliance. Depending on where you live, a lack of a passport could translate into being grounded - literally - by the government.

The roughly 8 million Americans who live abroad automatically get a couple additional months each year to file their taxes . Filing to the Internal Revenue Service from overseas is more confusing, complicated, and expensive than it is for Americans at home.

Under the law, the IRS defines a delinquent debtor as a person owing a legally enforceable tax liability of more than $51,000 in 2018. This includes the tax, penalties and interest, which can add up fast. A tax lien must be filed, and all administrative remedies for lien relief must have lapsed or been denied. It also includes those who have been issued a tax levy.

When a taxpayer who is on the delinquent list applies for or renews a passport, there's a 90-day process for resolving erroneous IRS certifications or for getting back in good standing for past-due taxes (such as establishing a payment plan with the IRS). But there's no grace period for resolving these issues before the State Department revokes a passport.   

The IRS won't report individuals who fall under the following situations:

People who have entered an installment agreement with the IRS to pay their taxes.

Tax planning 2018: Confusion under new tax law

  Tax planning 2018: Confusion under new tax law Individuals who are working on their tax planning can't be blamed for feeling uncertain and confusedSigned into law by President Donald Trump in December, the Tax Cuts and Jobs Act (TCJA) includes lower tax brackets and a nearly doubling of the standard deduction. But some taxpayers who are doing their tax planning for 2018 are hitting complications, thanks to several provisions that remain unclear.

Under a new law, the Fixing America’s Surface Transportation Act, or FAST Act , the IRS is required to provide a list of people who owe back taxes to the U.S. State Department, which can deny, revoke or limit the ability of these individuals to use their passports .

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 Here’s How China Can Escalate a Trade War With the U.S.

Those who have settled their tax debt through an offer in compromise or a Justice Department agreement.

Those who appeal a tax levy through an IRS collection due-process hearing.

Those who have request innocent spouse relief by filing Form 8857.

Also excluded are individuals serving in a combat zone, living in a federal declared disaster area, in a bankruptcy proceeding, have debts in a noncollectable hardship status or who are victims of identity theft.  

For tax debtors who want to keep their U.S. passport privileges, the most expedient way to avoid being placed on the IRS list is to enter into an installment agreement with the agency and begin making payments.

If you think you may be subject to a passport restriction because of a tax debt, don't wait until your next travel abroad. Instead, call the National Passport Information Center at 877-487-2778 to inquire about your situation. If you owe back taxes, hire a tax professional to advise you on the various arrangements to settle your debt with the IRS, or contact the IRS at 800-829-1040.

This is the biggest threat to your family inheritance .
If you're in line to receive a windfall from your rich grandparent, taxes aren't the biggest problem you'll face. Instead, you should worry about your other family members.A poll by TD Wealth showed that 44 percent of attorneys, trust officers and accountants cited family conflicts as the biggest threat to estate planning.

Source: http://us.pressfrom.com/news/offbeat/-164977-owe-back-taxes-you-could-lose-your-passport/

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