Americans living in UK must still pay their US taxes or risk of getting their passport taken
If you are a dual citizen of UK/US, then it can bring exceptional benefits, like easy access to both countries and work in both countries. But it can also have some implications of tax and investments that you hold or any inheritance like pensions etc. which you receive from US citizen, which have sold a UK property or your income is above $100000.
U.S. citizens are aware of their U.S. tax obligations, but Americans living in the U.K. are generally not aware of these taxes.
The Internal Revenue Service (I.R.S.) has clearly shown that Americans having more than $52000 overdue taxes, I.R.S. will revoke their passports -regardless of where they live
IRS is now permitted to request the State Department to stop issuing new passports and renewals of passports marked as a default by sending a notice and a letter to the tax payer
A tax payer will receive a letter 6152 and a notice of CP508C, which is the “Notice of Certification of Your Seriously Delinquent Federal Tax Debt to the State Department”. Another “Notice of intent to Request U.S Department of State Revoke Your Passport” is also issued before it refers to the State Department.
Impact of passport revocation rule:-
This decision to revoke passports by sending a letter stops the issue of reissue of existing passports and issuing new passports. It will mark the attention of tax supervisors. This rule impacts a lot especially on expats and on the individuals who cross regularly the border of Canada or Mexico for work etc.
If the passport of an individual is revoked when the are away the border then a temporary passport will be issued to them for returning to the U.S.
The IRS passport revocation has been implemented to prevent financial harms to the taxpayers. There is a message that tax payers having tax debt have to contact IRS to resolve this problem and avoid their passport revocation.
Also debtors are given 30 day response to the notice.
Who are exempted?
The taxpayers who are victim of bankrupt, or any identity theft or any type of hardships that they are not eligible to pay the tax default, wont have passports revoked. There is no letter sent to those people.
Other people who are not included in case are those living in a federal disaster area and are in the process of negotiation to IRS.
The tax payers who have got the notice of passport revocation, and have plans to travel abroad can contact the government and request for tax exemption. It can also happen that a person is returning to US and when he reaches the border, he finds out that his passport is canceled and it can only be settled by paying the debt.
Bottom line:-
So at the end it was find that most of the American prefer to overpay the taxes whole year and get a refund that shows that they will take a small paycheck every year to home.
This tax collection initiative by ISR took a amid toll the Covid-19. For dealing with these challenges, the government has announced a set of relief for the people undergoing tax related issues.
