If lawmakers push a provision through in December, US citizens who owe back taxes will have more to worry about than accumulating debt. As part of a transit and highway funding bill currently being negotiated in Congress, the provision would allow the feds to revoke, deny, or limit a person's passport if he or she owes more than $50,000 in "seriously delinquent tax debt" (including interest and penalties), CNNMoney reports. Only people against whom the IRS has filed a lien or levy would be subject to lose their passport under the provision, which will take effect Jan. 1 if it passes, and the State Department could issue exceptions for individuals contesting the tax bill or working with the IRS (e.g., setting up an installment plan), as well as for those traveling for humanitarian or emergency purposes. The Joint Committee on Taxation estimates the provision will raise nearly $400 million over 10 years, the Wall Street Journal reports.
Although it may seem odd to tie important travel documents to a beef with the taxman, Forbes compares it to having a pile of unpaid parking tickets and not being able to register a car or renew a driver's license. An LA attorney who thinks the measure is too harsh tells CNN that $50,000 can build up quickly and that there may still be holdups as higher-ups deem whether a situation qualifies as an emergency, for example. For Americans living overseas, a new foreign tax act could complicate matters further. A lawyer who advises a US expatriate group tells the Journal that "Americans abroad need their passports for many routine activities of daily life, such as banking, registering in a hotel, or registering a child for school, and mistakes could be disastrous." A DC accounting firm partner agrees, noting if the measure passes, "it will be imperative for Americans traveling … or living abroad to pay attention to IRS notices—assuming they receive them." (Read more IRS stories.)