It’s Fix The Tax Code Friday!
As part of the Fixing America’s Surface Transportation Act, or “FAST Act,” the federal government has now been tasked with yanking passports from delinquent taxpayers. Under the law, the IRS is required to turn over a list of seriously delinquent taxpayers to the State Department: the State Department may then refuse to issue or renew a passport or revoke any passport previously issued to a seriously delinquent taxpayer.
So what kind of tax debt will get you labeled a “seriously delinquent” taxpayer? Under the new law, the key number is $50,000: that’s the dollar limit for your total tax debt, including interest and penalties, before your name ends up on the IRS list.
Complicating matters, another law – this one from 2005 called the REAL ID Act – bars federal agencies, including the Transportation Security Administration (TSA), from accepting driver’s licenses and identification cards issued by states that do not meet certain standards. That means that within the next few years, every air traveler will need a REAL ID-compliant license, or another acceptable form of identification, such as a passport, for domestic air travel. If you live in a state that is not compliant, no passport = no flights.
That means that, depending on where you live, losing your passport could mean losing your freedom to fly not only internationally but domestically, as well.
(You can find out more about the new passport law and the REAL ID Act here.)
That, of course, brings us to today’s Fix The Tax Code Friday question:
Should the federal government revoke passports for taxpayers who have delinquent tax debts?
