270 thoughts on “Passport Revocation: The new weapon in the US war on Americans abroad”

1. If they won’t revoke, then they still get us when time to renew.

   I have less than five years to figure out how to escape this before losing my family.

   “Land of the free” Maybe for the freeloading homelanders, but not for us.

2. Today, I am at work after only ten hours of sleep total over the last three nights. How in the world can I possibly comply with any of this?

   How can I possibly meet the requirements to gain Japanese citizenship?

3. “We would suggest that if you have seriously delinquent tax debt, you contact the IRS to resolve your debt before applying for a passport.”

   We would suggest that if you don’t have a tax debt but have been falsely certified, try for a backdated relinquishment. The IRS will not answer your letters.

   Ҥ 51.60 Denial and restriction of passports.
   (a) The Department may not issue a passport, except a passport for direct return to the United States, in any case in which the Department determines or is informed by competent authority that:”

   So if you’re an accidental and you’ve never lived in the US, i.e. any hypothetical entry to the US would not be a direct RETURN, so you can’t legally enter the US at all.

   “The days of living as a U.S. citizen outside the United States are clearly numbered.”

   No way. The numbers are negative, but how precisely, they’re not CLEARLY numbered ^_^

4. “The $50,000 “tax debt” includes interest and penalties. It’s easy for an American abroad to exceed this simply through “form transgressions”.”

   Not that easy, apparently, given that most never file.

   Despite the scary-scary from the likes of Ms Jeker (“If the IRS had hands, I can just see it rubbing its palms together in delight at the effect of the new enforcement rules! ”), there don’t seem to be any actual reported cases where the IRS has studied a random FATCA report, created a false return in the accountholder’s name, assessed an imaginary tax debt, applied for certification, achieved certification, and got hold of the victim and/or the victim’s non-US assets.

5. “The days of living as a U.S. citizen outside the United States are clearly numbered.”

   It seems to work for those who comply with the conditions (including the form-filing) and can meet the conditions for residence/citizenship. What’s changed for US citizens, as a result of FATCA, is the difficulty with banks.

   The US can’t stop citizens from living in other countries, but obviously the US can set conditions for renewal of passports, just like any other country can.

   Residing in a country which sets stringent barriers for achieving PR/citizenship status, gets more and more difficult – and not only for US citizens. Very hard on those who find themselves in that situation.

6. The expression goes that when the only tool you have is a hammer every thing starts resembling a nail.

   When you write a bill designed to criminalize living abroad every expat starts resembling Whitey Burger.

7. Most US bills that affect expats seem to be aimed at getting money or pleasing US-resident voters.

8. It’s a bit strange though.

   According to the IRS (https://www.irs.gov/individuals/understanding-your-cp508c-notice), passport revocation only affects those with “Seriously delinquent tax debt.”

   Seriously delinquent tax debt is an individual’s unpaid, legally enforceable federal tax debt totaling more than $51,000 (including interest and penalties) for which:

   * Notice of federal tax lien has been filed and all administrative remedies under Internal Revenue Code Section 6320 have lapsed or been exhausted,

   or

   * A levy has been issued.

   Why don’t they just collect the debt using the lien/levy ?

9. Ms Jeker says:

   It is difficult for the IRS to collect taxes if they are assessed against a US/non-US taxpayer assuming the person is overseas and has no US assets. Once an assessment has been issued, procedural mandates require that the IRS give the taxpayer notice of the assessed amount and demand payment within 60 days. If the taxpayer fails to pay the assessed amount after such demand, a so-called federal tax lien arises which attaches to the taxpayer’s property wherever situated, including property located in a foreign jurisdiction. The IRS has no express statutory authority to take administrative collection action against such foreign-situs property.

   And, of course, no power to take “administrative” collection action.

   In the absence of treaty assistance, the IRS must pursue judicial collection remedies in order to collect taxes owing. Judicial efforts to collect US taxes by levying on the assets of a US or non-US taxpayer when assets are located in the US is generally not very difficult. This is not that case, however, when a US or non-US taxpayer has assets located outside the United States. The issue becomes even more complex when the IRS attempts to collect assessed taxes through a foreign court, regardless of whether the taxpayer’s obligation is first reduced to a judgment in a US court. As a general matter, the courts in one country are not very willing to collect taxes benefiting the sovereign of another country since this concerns the revenue matters of that country. Enforcement efforts in this area could inevitably lead to policy issues and questions about the legitimacy of the financial and tax policies of that country.

   You bet your boots it could. It could also inevitably lead to policy issues and questions about the legitimacy of the financial and tax policies of America.

   But revoking the US passport wouldn’t result in collection of the certified debt, unless the passport-holder was able to pay, and agreed to pay, in order to keep the passport. It couldn’t possibly be used successfully against a person living in another country without the passport-holder’s co-operation.

   The passport could be revoked, or limited, creating potential hardship for an individual without residence-country PR/citizenship status, but the assets could not be seized. (Or so it seems to me – I’m only stating my own non-expert opinion)

   Which suggests (to me) that the 220,000 who’ve paid up really did owe lots of money in US taxes. Otherwise, they’d presumably contest the certification.

10. How does PR status protect one from harm caused by losing their US passport?

    “Cooperation” of the tax payer. Choice A, pay whatever we say, regardless if actually owed by you or not, and carry on living in your home and with your family. Choice B, do not pay and lose passport, family, home, job and whatever else you have built for yourself outside US juristiction.

    Your dictionary differs from mine.

11. “How does PR status protect one from harm caused by losing their US passport?”

    It doesn’t, necessarily. It depends on the residence/citizenship laws of the residence country.

12. Then why state, “The passport could be revoked, or limited, creating potential hardship for an individual without residence-country PR/citizenship status”?

13. An individual who has neither PR status or citizenship is in an inherently insecure situation. If the residence country requires those without a right to remain to maintain a valid passport, as a condition of remaining in the country, loss of the passport would increase the insecurity.

14. Well, I, for one, would never have been able to apply for or extend permanent residency status in my country as a USC without a valid passport. If you only have the one citizenship, you’re then screwed if your passport gets revoked or renewal is denied. You’re most likely facing deportation back to the US.

15. And requiring PRs to have a valid passport as a precondition to abtaining and maintaining PR status differs in what ways?

16. Possibly. It just depends on the laws of the residence country.

17. “And requiring PRs to have a valid passport as a precondition to abtaining and maintaining PR status differs in what ways?”

    Sorry, I haven’t a clue what you’re asking.

18. Sure you do.

    First you make the following statement, “The passport could be revoked, or limited, creating potential hardship for an individual without residence-country PR/citizenship status”, which means that an individual lacking PR staus has greater potential for hardship than an individual who has PR status.

    When asked about this, you state that if the country of residence requires a passport of those without a right to remain as a condition of remaining, then loss of passport would increase insecurity,

    So I asked how are individuals who are without PR status less secure than those with PR staus and required to have a passport to maintain PR status?

    Earlier you answered that they are not, depends on the laws of the country they live in. That being the case, your statement “The passport could be revoked, or limited, creating potential hardship for an individual without residence-country PR/citizenship status” is incorrect. Individuals with only one passport are at great risk unless the country they live in do not require a passport to maintain PR status.

    Japan does as does the country Petlover lives in, which I think is not Japan, though I am not sure.

19. I’ll summarize: If you live outside the US and you have only US citizenship, then there’s a non-zero chance that you’re fucked.

    However, we can argue until we’re blue in the face about what those percentages are. Depends on various factors including country of residence, past compliance history, general US government competence.

    Based on no evidence other than past IRS behaviour I expect that there will be zero immediate (circa 10 years) threat of ordinary non-compliant US citizens having any difficulty with passport renewal.

20. @ Japan T
    “Individuals with only one passport are at great risk unless the country they live in do not require a passport to maintain PR status.

    Japan does as does the country Petlover lives in, which I think is not Japan, though I am not sure.”

    I’m in Austria and I believe the rule is the same throughout the EU.

21. “First you make the following statement, “The passport could be revoked, or limited, creating potential hardship for an individual without residence-country PR/citizenship status”,

    Yes, that’s what I said, that’s what I meant to say, and it’s correct.

    “which means that an individual lacking PR staus has greater potential for hardship than an individual who has PR status.”

    That’s what you said.

    This is all a pretty pointless diversion from the point I was making, which is that the passport revocation law doesn’t help the IRS collect money if the passport holder has no US assets. Leading me to conclude that that’s probably not who they’re sending letters to. IMO.

22. According to Greenback:

    The good news for Americans living overseas, according to McKeegan, is that penalties associated with the Report of Foreign Bank and Financial Accounts are not included in this enforcement.

    “Otherwise, all the expats that haven’t been filing their taxes would automatically be included in this,” McKeegan said.

    https://www.cnbc.com/2018/07/12/if-you-owe-a-big-tax-bill-your-passport-could-be-on-the-line.html

    So if that’s correct, it seems to me the only passport holders likely to be on the list for letters are those with actual outstanding assessed US tax debts. ICBW

23. It’s correct that FBAR penalties aren’t included:

    IRM para. 5.1.12.27.2

    https://www.irs.gov/irm/part5/irm_05-001-012r#idm140156598374320

24. @plaxy

    Not sure I get this comment: “This is all a pretty pointless diversion from the point I was making, which is that the passport revocation law doesn’t help the IRS collect money if the passport holder has no US assets.”

    Isn’t that the point though? If the tax debtor has US assets, the IRS can seize them. If the tax debtor has no US assets, the IRS generally can’t collect, but they can extract “voluntary” payment if they threaten the passport. This would apply both to US residents and non-residents.

    Overall though this is not yet a problem for the merely non-compliant. The current sequence is: you already owe the IRS a large sum of money -> the IRS sends you a letter and forwards your details to the State Department -> the State Department at minimum denies your passport renewal.

    A non-filer is not necessarily non-compliant, as we all know. It would be a long and complicated process (requiring at very least some incriminating FATCA data) to identify a non-filer as sufficiently delinquent to risk losing the passport. It’s not impossible, but not something I see happening to “ordinary” non-compliant US citizens abroad anytime soon (particularly in light of recent complaints about how the IRS can’t do anything with FATCA reports, and the fact that FBAR finds are not included).

25. “If the tax debtor has US assets, the IRS can seize them. If the tax debtor has no US assets, the IRS generally can’t collect, but they can extract “voluntary” payment if they threaten the passport.”

    Yes I agree the passport-holder might agree to pay, if s/he could, in order to keep the passport. But the IRS couldn’t collect if the passport-holder couldn’t pay, or refused to pay. In which case passport revocation wouldn’t be cost-effective.

    Whereas a passport-holder with US assets is vulnerable to confiscation.

    “Overall though this is not yet a problem for the merely non-compliant.”

    Indeed. I would leave out the yet, but that’s merely my opinion of course.