If You Owe, Owe, Owe You Can’t Go, Go, Go – IRS and Im­mi­gra­tion Team Up on Delin­quent U. S. Tax­pay­ers

Un­der a law passed in De­cem­ber 2015, se­ri­ously delin­quent U. S. tax­pay­ers could find them­selves without valid travel doc­u­ments or find it dif­fi­cult re­new to their pass­port

Thai-American Business (T-AB) Magazine - - Contents - Jonathan Blaine is Tax Di­rec­tor at DFDL. He can be con­tacted at Jonathan. Blaine@ dfdl. com. Writ­ten by: Jonathan Blaine

Pic­ture it, your pass­port is set to ex­pire in 25 days and you need to re­new it so you can travel for busi­ness or re­main in Thai­land on your cur­rent visa. You take your pass­port to the U. S. Em­bassy in Bangkok with com­pleted ap­pli­ca­tion and money in hand. You sub­mit ev­ery­thing re­quired for re­newal of your pass­port. Shortly there­after you are in­formed that your ap­pli­ca­tion can­not be pro­cessed and will be held for 90 days. Why? Be­cause you owe the In­ter­nal Rev­enue Ser­vice ( IRS). But wait, since when did the State De­part­ment be­come a tax col­lec­tor? And any­way, how do they know? Isn’t my tax in­for­ma­tion pri­vate?


Un­der a new law passed in De­cem­ber 2015, the Fix­ing Amer­ica’s Sur­face Trans­porta­tion Act, or “FAST Act,” it cer­tainly can. Even though this law was en­acted to pro­vide for trans­porta­tion fi­nanc­ing, there is a very spe­cial sur­prise for the un­in­formed hid­ing within. Un­der pro­vi­sions of the law, the State De­part­ment is em­pow­ered to hold up any ap­pli­ca­tion for pass­port re­newal re­ceived from any in­di­vid­ual owing taxes of over USD 50,000 ( in­clud­ing penal­ties and in­ter­est). The State De­part­ment is also per­mit­ted to can­cel the pass­ports of in­di­vid­u­als owing such amounts as well. As a re­sult, these “se­ri­ously delin­quent” tax­pay­ers could find them­selves stranded abroad without a cur­rently valid pass­port. This could cause sig­nif­i­cant headaches for Amer­i­cans liv­ing here in Thai­land as liv­ing in the King­dom without a valid pass­port or visa is po­ten­tially il­le­gal and could re­sult in de­por­ta­tion.


In­vari­ably there will be those in­di­vid­u­als who will ask, “How will the State De­part­ment know if I owe money to the IRS? Aren’t my tax records pri­vate and sepa- rately held by the IRS?” While his­tor­i­cally this was a valid claim, the FAST Act specif­i­cally re­quires that the IRS cer­tify to the State De­part­ment the iden­tity of any­one own­ing more than USD 50,000 in back taxes. This cer­ti­fi­ca­tion process was slated to be­gin ear­lier this year but a re­view of the IRS web­site an­nounc­ing these new shows that as of the date of writ­ing, they have not yet be­gun to pro­vide the list of cer­ti­fied sig­nif­i­cantly delin­quent tax pay­ers.

Thus, it is ad­vis­able that any in­di­vid­ual who owes sig­nif­i­cant taxes to the IRS should make ar­range­ments to set­tle any out­stand­ing amounts via im­me­di­ate pay­ment or through the ne­go­ti­a­tion of a pay­ment plan prior to the first cer­ti­fi­ca­tions or shortly there­after to avoid de­lays in pro­cess­ing of any re­newal ap­pli­ca­tion or worse, no­ti­fi­ca­tion of pend­ing can­cel­la­tion.

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