WSJ: “Americans: Pay Your Taxes – Or Lose Your Passport”

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Wall Street Journal had an interesting piece yesterday regarding non-issuance of passports or canceling them for those that have not paid their taxes.

WSJ Americans Pay Your Taxes--Or Lose Your Passport

United States is the only country that taxes its citizens of worldwide income and now it could be a goof time for those that carry multiple passport to renounce their US citizenship.

You can access the WSJ piece here of which below is an excerpt:

Congress is poised to enact a law denying or revoking passports for U.S. citizens who haven’t paid their taxes.

Under a new law expected to take effect in January, the State Department will block Americans with “seriously delinquent” tax debt from receiving new passports and will be allowed to rescind existing passports of people who fall into that category. The list of affected taxpayers will be compiled by the Internal Revenue Service using a threshold of $50,000 of unpaid federal taxes, including penalties and interest, which would be adjusted for inflation.

The rule has been passed in similar versions by both the House of Representatives and the Senate. It is part of a highway-funding bill, H.R. 22, that is before a conference committee. Congress is expected to pass it in early December.

Conclusion

There can be many reasons why someone could be behind their taxes and not all of them are tax dodgers. It is quite drastic move to not to issue a passport for those that have a modest amount of unpaid taxes such as the $50K figure here.

Why not to close the loopholes that allows many companies not to pay taxes or pay very little? That would bring in far more than the suggested figure of less than $400 million here.

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