Congress to U.S. Citizens: Pay Your Income Tax or Forfeit Your Passport
A common question from the EXPAT community is what happens if I do not pay my US Taxes? Well for the first time, in addition to facing various IRS actions, a US Citizen could lose their US Passport and their ability to travel internationally.
Just recently, Congress passed a five-year, $ 305 billion highway funding measure that includes a provision for the denial or forfeiture of US passports by U.S. citizens who owe large tax debts. A large tax debt is defined as a tax debt that exceeds $50,000 for which the IRS has filed a notice of lien or levy.
With the implementation of the Foreign Account Tax Compliance Act (FATCA) in 2015, which requires other countries’ financial institutions to report back to the IRS on accounts held by U.S. taxpayers, we urge U.S. citizens abroad to ensure that their financial affairs are in order and compliant by the New Year.