Transportation Bill Allows IRS To Revoke U.S. Passports

I’d say that a second passport is a more critical piece of your global diversification plan right now than ever before.The U.S. Senate has passed a transportation bill that includes a section giving the IRS the power to revoke the passport of any American who the IRS decides might owe US$50,000 or more in taxes.

The IRS wouldn’t have to prove you owe the tax. Simply alleging that you owe the tax is enough. A computer glitch, a data-entry error, or an identity thief hijacking your Social Security number, among many other things, could create an erroneous tax liability for you. Should any of those things happen now, you’d have no immediate recourse with the IRS regarding your passport and your ability to travel. If the IRS’s computer were to decide, for whatever reason, that you owed US$50,000 in tax while you were, say, traveling in Europe for a consulting job, you could find yourself stuck, without a valid passport, unable to travel home, unable to travel onward, but maybe without the visa required to stay indefinitely wherever you happen to find yourself.

Fortunately, the House version of the bill doesn’t include the provision for the revocation of a passport. A committee has been formed to work out the differences in the two versions of the bill. You can (and I hope you will) contact House members of the committee to urge them to vote against the provision.

Hon. Dave Camp, Chairman (R-Michigan)
Ways and Means Committee
1102 Longworth House Office Building
Washington, DC 20515
Tel: (202)225-3625

Hon. Pat Tiberi (R-Ohio)
106 Cannon House Office Building
Washington, DC 20515
Tel: (202)225-5355

Hon. Earl Blumenauer (D-Oregon)
1502 Longworth House Office Building
Washington, DC 20515
Tel: (202)225-4811

While the practical implications for this provision may be limited (how many people could possibly be affected by the US$50,000-tax-owed threshold?), that’s not the point. The point is that this is another attack on the U.S. constitution, as the law violates due process. Additionally, it gives the IRS yet further power to harass and intimidate taxpayers, including perfectly law-abiding ones.

Once passed, it’s not inconceivable that the tax threshold could be lowered, despite a clause as the provision is currently drafted for inflation adjustments to the US$50,000 amount.

Again, I strongly encourage you to take the time to contact members of the committee reviewing the language of this law or your home state Congressman to lodge your objections formally.

Here’s the other thing I strongly encourage you to do: Start working right now on obtaining a second passport. As I cautioned last week, don’t be tempted to go the route of a black or grey market passport. You have many options for obtaining a legitimate second citizenship that would give you the second passport you need.

It will take time, as most countries require you to have legal residency for at least five years before you’re able to apply for a passport. But delay no further.

Three countries where it is relatively easy to obtain citizenship via residency are the Dominican Republic, Uruguay, and Ireland. Each requires minimal time in the country before you’re able to apply for citizenship.

The best current resource I know detailing all your best current options for obtaining a second passport is “The Passport Book” by attorney and friend Robert Bauman.

Lief Simon