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Need a Passport? Make Sure You Pay the Tax Man First!

January 9, 2017 | By More

delinquent taxes and passportsWe all have heard about the legends of people in times gone by who left for another country when faced with criminal charges here. However, this is no longer a possibility for American tax payers. The IRS reserves the right to revoke your passport for noncompliance with tax laws. This could have huge ramifications for many people as passports are increasingly used as identification even on domestic flights.

Flying Domestic? Get Your Papers in Order

Airline security has become increasingly stringent, making it difficult for many people to travel quickly. In addition to long security lines and the need for five or more different forms of identification, you may need a passport in the near future as well according to several sources. This is an unprecedented move in the United States, where passports were once a need only for people planning to leave North America. While it will pose an inconvenience for many, it may leave people who are behind on their taxes permanently grounded.

The Real ID Act and You

The Real ID Act has standardized the requirements to get photo identification such as a state ID or a driver’s license across states. New York, Louisiana, New Hampshire, and Minnesota are the sole four renegade states that have failed to institute this federal act, which means that identification cards from these states may soon not be valid identification for interstate air travel. People from these states will need a federal form of picture identification, which for most people means a passport.

However, there are significant barriers to procuring a passport. People struggle to get this document if they do not have the money for the application and processing. In addition, people who are convicted criminals as well as those who are on the wrong side of the IRS often cannot get a passport. Simply failing to pay your taxes may leave you unable to fly the friendly skies if you are from one of the aforementioned four states.

How Can the IRS Take Your Passport?

At the same time that ID laws are changing, the sphere of power of the IRS is changing as well. Section 7345 of the tax code includes a new line allowing the tax agency to revoke or deny passports to anyone owing more than $50,000 to the IRS. The bill enacting this law was passed quietly by a Senate and House majority and will take effect as early as 2017.

A wise man once observed that nothing is certain but death and taxes. If you are planning to see new sights in the near future, make sure your tax paperwork is in order so you can travel freely to the destination of your choice.

Contributed by Gary M. Kaplan – MAcc, MST, C.P.A.
Gary M. Kaplan, MAcc, MST, C.P.A. is located in Boca Raton, Florida. For more information or to contact Gary M. Kaplan, visit http://gkaplancpa.com/

Article information should not be used exclusively to make legal, financial or tax decisions. Because laws and rules can change frequently, topics may not always be updated to reflect these changes or may not apply to your unique situation. It’s prudent to seek out the advice of a professional for your specific needs.

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Category: Taxes

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