updated 2:57 PM CEST, Sep 21, 2023

Ahead of Christmas exodus, ACA reiterates importance of passports for Americans resident abroad

Fourteen days before Christmas, as American expats around the world were beginning to pack their bags and return to the States to celebrate the holidays with their families, the American Citizens Abroad formally reiterated its concern about a recent decision by the IRS to row back on a "temporary suspension" of a regulation that permits the government to revoke or deny U.S. passports to Americans "with open National Taxpayer Advocate Services cases".

The Internal Revenue Service announced its reversal of its temporary suspension on Oct. 16, and means that some taxpayers who are challenging the government's allegation that they owe US$52,000 or more in tax are in danger of having their passports revoked or impossible to obtain or renew.

In a statement issued on Wednesday, the ACA noted that the IRS's decision to reverse its earlier position "is based on the IRS belief that excluding cases for certification solely on the basis that the taxpayer is seeking TAS intervention and assistance could permit 'won’t pay' taxpayers to circumvent the intent of the law – allowing them to continue to hold or renew a passport even with a debt in excess of $52,000". 

"ACA maintains that loss or denial of a U.S. passport for Americans overseas holds serious and unparalleled consequences compared to those faced by U.S. citizens living in the United States," the ACA statement continued.

"An ACA Freedom of Information Act request has revealed that of the over 260,000 cases reported for potential passport revocation, approximately 1,850 represent individuals who are overseas residents.

"A U.S. passport for these Americans, and any American living overseas, is the only official U.S. document conclusively proving US citizenship.

"It is vitally important in a way that is not so for Americans living in the United States."

Particularly important in 'high
risk countries, danger zones'

The ACA statement goes on to note that for Americans who are working overseas in "high-risk countries and danger zones, a U.S. passport may be their only proof to the U.S. Embassy or Consulate" of the fact of their U.S. citizenship, "in circumstances necessitating urgent assistance".

"Also, a U.S. passport is the underpinning document for many Americans to hold 'work permits' and 'right of residency' in many foreign countries. Without such a document, many would be unable to work or maintain their livelihoods if their U.S. passports were revoked or denied." 

The ACA statement stresses that the organization "supports the U.S. government efforts to track down and prosecute real tax evaders" but adds: "U.S. citizens who are attempting to come into compliance, given the new bank account reporting forms, or those who may have been assessed erroneously calculated tax debts, should not find themselves coerced into paying onerous and potentially bankrupting amounts just to keep their passports when they are not engaged in active tax evasion.

"The reversal appears to extend to those future cases of individuals considering addressing an appeal to an IRS tax decision. This goes against one of the major principals enshrined in the Taxpayer Bill of Rights, the right to a fair and just tax system, as it forces them to pay first – even if the [notice that they need to pay] is in error – in order to maintain their right of free movement."

According to the ACA, prior to reversing itself, the IRS had said it would temporarily  exclude from its "passport certification" rules those cases involving individuals who had sought help from the National Taxpayer Advocate's offices, as well as reversing certifications of individuals who are now on the books of the Taxpayer Advocate Service but who had been certified prior to engaging with the TAS.

The ACA statement quotes acting TAS advocate Bridget Roberts as saying that "TAS has long advocated for the IRS to exclude from certification taxpayers who came to TAS and were actively working with us prior to being certified."

To read the ACA statement in full on the organization's website, click here. 

To see the ACA's official position on passport revocation in full, click here.

Based in Rockville, Maryland, the ACA is a non-partisan, non-profit organization which represents the interests of American citizens resident outside of the U.S.

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