Does the Tax Man have the right to prevent us from traveling, even without a formal charge of evasion or another crime? Maybe we're about to find out.
You're standing at the airport. The ticket agent clacks away on the keyboard. She looks up. "I'm sorry," she says. "We can't let you board the plane today." Why? "It's the IRS. They say you haven't paid all of your taxes."
It sounds like the opening scene of a straight-to-DVD Washington thriller. It's actually a few votes from becoming a reality. A new bill, quietly making its way through Congress, allows the federal government to stop people with unpaid taxes from leaving the country-- even if they haven't been charged with tax evasion or any other formal crime.
It all started last fall, when Senator Barbara Boxer introduced the "Moving Ahead for Progress in the 21st Century Act" (or "MAP-21" as it's now called), to reauthorize funds for federal highway and transportation programs. While that doesn't sound like anything having to do with your taxes, the bill includes a little-noticed section that allows the State Department to "deny, revoke or limit" passport rights for any taxpayers with "serious delinquencies."
Here's how it would work. If someone owed more than $50,000 in back taxes, the IRS would be able to send their name over to the passport office for suspension, provided that the IRS already either filed a public lien or a assessed a levy for the outstanding balance. The bill does provide a few exceptions though. For example, if a person has set up a payment plan (that they're paying in a timely manner), is legitimately disputing the debt, or has an emergency situation or humanitarian reason and must travel internationally, they may be able to leave for a limited time despite their unpaid taxes.
IS THAT LEGAL?
Timothy Meyer, a constitutional law professor at the University of Georgia, who's also served as a State Department lawyer, believes that, for all its creepiness, the rule is probably legal. He concludes that if the passport provisions of MAP 21 became law and were challenged, chances are, the courts would find that they satisfy Due Process concerns. Even though there's no judicial hearing before your travel rights are restricted, the bill does protect a passport holder who's challenging the alleged tax debt. And according to Professor Meyer, that's probably enough here.
"Courts have upheld statutes calling for the revocation and denial of passports to those in arrears of child support payments," he explains. "In part, because the child support payments can be contested."
As Meyer points out, MAP 21 certainly isn't the first law to limit a person's right to travel because they owe somebody money. The State Department screens passport applications every day for people who owe child support of more than $2500--a lot less than the $50,000 proposed here. And the tax system is routinely used to get Americans to make good on their outstanding liabilities. In fact, over the next few weeks, some folks won't be getting the refund check they're expecting if, for instance, they've defaulted on their student loans, owe state or local taxes, or haven't ponied up for the child support they owe. Most people don't realize it, but the IRS is in contact with federal and state agencies throughout the year, making sure you've paid your debts before they send you a chunk of change back in the mail.