-Published: Thursday, December 12, 2019-




By the A.M. Costa Rica staff

The U.S. Internal Revenue Service created a temporary policy that protected persons in danger of losing their passport if they were challenging the government before the National Taxpayer Advocate. The IRS policy won praise from the advocate,  Bridget Roberts, but now the IRS is changing the policy again.

That means those taxpayers who owe large sums in taxes to the government may continue to be barred from renewing or getting a U.S. passport even if they are fighting the IRS money claims.

American Citizens Abroad pointed out the change Wednesday and said that this could create bad situations for U.S. citizens in foreign countries.  The expat advocacy organization said that a Freedom of Information Act request revealed that of the over 260,000 cases reported for potential passport revocation, approximately 1,850 represent individuals who are overseas residents.

The IRS reversal is based on the agency's belief that allowing big debtors to get passports could allow cheats to circumvent the existing rules by appealing their case to the taxpayer advocate.
This would allow them to continue to obtain or renew a passport even with a debt in excess of $52,000, which is the current threshold.

American Citizens Abroad said that loss or denial of a U.S. passport for Americans overseas holds serious and unparalleled consequences compared to those faced by U.S. citizens living in the United States. A U.S. passport for these Americans and any American living overseas is the only official U.S. document conclusively proving U.S. citizenship, and it is vitally important in a way that is not so for Americans living in the United States, said the organization.

For those Americans working in high-risk countries and danger zones, a U.S. passport may be their only proof to the U.S. embassy or consulate in circumstances necessitating urgent assistance, it added. Also, a U.S. passport is the underpinning document for many Americans to hold work permits and right of residency in many foreign countries, it said. Without such a document, many would be unable to work or maintain their livelihoods if their U.S. passports were revoked or denied, the organization added.

On Oct. 16.  the IRS announced that it would not withhold certification from taxpayers who had appealed their cases to the taxpayer advocate. The IRS does not issue passports, but the U.S. State Department that does relies on the tax collecting agency to certify that an applicant does not owe a lot off money.

The taxpayer advocate, Roberts, said her office has long advocated for the IRS to exclude from penalties taxpayers were actively working with the advocate. Roberts said that certain groups of taxpayers may have been so desperate to get or keep a passport they were unduly pressured into agreeing to unrealistic payment plans, perhaps based on incorrect liability determinations.

She said that many who work with her office were taxpayers who did not believed that they owed money and were challenging an IRS assessment. Her office also handles taxpayers seeking a waiver from penalties based on reasonable cause and also those seeking reconsideration of an IRS audit.

American Citizens Abroad said it supports the U.S. government efforts to track down and prosecute real tax evaders. However, U.S. citizens who are attempting to come into compliance given the new bank account reporting forms, or those who may have been assessed erroneously calculated tax debts should not find themselves coerced into paying onerous and potentially bankrupting amounts just to keep their passports when they are not engaged in active tax evasion, the organization said.

The IRS can withhold approval of a passport for a taxpayer who owes $52,000 or more and also can prevail on the State Department to revoke existing passports which usually are valid for 10 years.

American Citizens Abroad's position on passport revocation can be found at AmericanAbroad.org site.




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