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US Expats Now Facing Passport Revocation For Tax Debt
Published: | 3 Oct at 6 PM |
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US expats who’ve had their passports revoked due to FATCA are now facing action as regards work permits and visas.
Passport revocation can have serious implications for expats with business visas and work permits, with the impact of action by the US taxman far more serious than that for US taxpayers in the home country. According to chair of American Citizens Abroad Jonathan Latowitz, problems caused by passport revocation are potentially far worse for US expats overseas than they are for domestic American citizens as it can trigger losses of jobs as well as the freedom to travel outside the USA.
According to a recently released notification from the IRS, letters are now being sent to indebted taxpayers living overseas warning the taxman is about to send their details to the US State Department along with a request to revoke their passports should they not come to an agreement as regards clearing their tax debts. Those receiving the letter will have 90 days to set up a payment plan, although domestic taxpayers are only allowed 30 days. Those US expat affected will have run up a tax debt of $52,000 or more, with action by the IRS commencing just under two years ago.
Excluding those on military service, it’s estimated some eight million American citizens are living, working or retiring overseas, with many believed to be unaware they’re at risk of having their passports cancelled. One problem, according to the IRS, is the length of time it takes to contact those in far flung locations due to slow postal services, but there’s also a problem with elderly expats who’ve moved addresses and forgot to inform the tax authority back in the home country. Again according to the IRS, it’s not hard to end up owing over $52,000 in back taxes, as rules for expats are complicated and errors are easily made, both by the taxpayer and the tax collector.
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