In a quiet bit of legislation enacted last month, the IRS has now been given the authority to have passports cancelled.

The law was buried in the transportation bill passed by Congress before their winter break in December.   It grants the IRS the power to cancel passports for any taxpayer who owes Uncle Sam $50,000 or more in back taxes, including penalties and interest.   Apparently, all they have to do is send a message to the State Department to have it done.  To have it reinstated, you would need to settle your tab with the IRS and apply for a new passport.

The new law is aimed obviously at those hoping to avoid paying taxes by fleeing the country.  You might think that $50,000 is a huge tax bill or deliquency, but when you consider how quickly penalties and interest can add up even from a modest tax bill, this may affect more people than you think!  Critics suggest that the new rule hinders the right for people to travel as they wish and that it removes certain freedoms.

According to the IRS, they hope that this program will help ‘reclaim’ approximately $400 million in back taxes, fines, and penalties over the next 10 years.

Moral of the story?  Pay your taxes or no 5 day, 7 city mileage run to Europe for you!