• January 28, 2016
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The world has gone global, and American citizens travel frequently to various parts of the world. When traveling abroad, carrying a valid passport as a proof of US citizenship is essential for routine activities such as foreign exchange transactions or checking into your hotel. It may come as a surprise, but if you have a ‘seriously delinquent tax debt’, you may have to put your travel plans on the back burner. The number of IRS tax defaulters is increasing sharply, and many of them are still unaware of the fact that their unpaid debts can jeopardize their travel plans.

In 2014, there were about 12.4 million delinquent American taxpayers throughout the world. Combined, the owe nearly $131 billion to the government, in the form of taxes, interest, and penalties. As of January 1, 2016, the IRS enforced much more stringent laws by funding bill to track delinquent taxpayers by authorizing the State Department to deny or revoke their US passports. As a result, many Americans are finding themselves at the receiving end of an impending travel ban. Let’s delve deeper into the impact of being tracked.

Impact on Your Passport

Forcing delinquent taxpayers to forfeit their passports is one of the strongest laws that the IRS has enforced to prevent defaulters with a ‘seriously delinquent’ tax debt’ from evading taxes and pending debts. The newly funded bill authorizes the Secretary of State to revoke, limit or deny passports to individuals with a tax liability of $50,000 or more. This new rule is not limited to American citizens; it is applicable to expats as well. The Fed’s Foreign Bank Account Report (FBAR) and Foreign Asset Tax Compliance Act (FATCA) mandates the non-resident Americans to report every year on the financial accounts they are holding outside of the US. It also requires foreign financial institutions to report the financial accounts held by American citizens or entities that have a substantial share of a US taxpayer, to the Federal Government.

Renouncing Nationality Won’t Help

Many American citizens, in a bid to escape their IRS liabilities, renounce their nationality, hoping to start afresh overseas. Some surrender their nationality to take up the citizenship of other countries that have relatively relaxed tax laws. Contrary to common belief, surrendering your nationality won’t help you get rid of your tax liabilities. The IRS has highly sophisticated mechanisms to track defaulters all over the world, especially in US-allied nations. No matter how far you go, the IRS will be able to track you.

The Way Forward

Tax filing, undoubtedly, is a complex process that may force you to delay the process, and this, in turn may lead to serious issues such as the instances we discussed. If you want to have a clean slate of tax liabilities, and ensure timely processing of the required paperwork, get in touch with one of our tax law experts. We can also help you resolve an existing issue and have your passport reinstated, provided you are ready to comply with the regulations and follow our advice.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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