Do you owe back taxes to Uncle Sam? Your passport is safe—for now.
Late last year, Congress enacted a law that would revoke passports of U.S. citizens who are “seriously delinquent” on tax payments to the Internal Revenue Service. The threshold is $50,000 or more, and it includes penalties and interest.
Roughly six months after the provision took effect on Jan. 1, however, there are no reports of enforcement so far.
The reason is likely because no regulations detailing it have come out. Currently, the IRS and State Department are working to write such regulations. People familiar with the matter don’t expect them until mid-November or even later.
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U.S. taxpayers residing here or abroad who have foreign financial accounts totaling more than $10,000 at any point in 2015 must also file FinCen Form 114 separately with the Treasury Department by June 30. The penalties for nonfiling can be draconian—up to 50% of the account, a year, and there is no filing extension, says Barbara Kaplan, a lawyer with Greenberg Traurig in New York.
The good news, she adds, is that next year Form 114, commonly called the Fbar, will be due at the same time as the tax return and permit extensions.