The IRS and the State Department are preparing to implement 2015 tax law changes that will allow the government to revoke or deny passports to individuals with seriously delinquent tax debt. About 270,000 taxpayers fall into this category.
In the article, Sardar expresses doubt that the changes will promote voluntary tax compliance.
“Taxpayers that don't pay their taxes usually don't do so, not because they don't want to, but because they have an issue. Will it get you compliance, now that there's more pressure points? Perhaps on the margins,” Sardar said. “But there's generally still a lack of ability to pay.”
Sardar also underscores that the passport certification process raises serious due process concerns.
Taxpayers are not provided an opportunity for a hearing prior to being certified as “seriously delinquent,” he said, and should get “a chance to resolve the issue before their status gets confirmed.”
“It's very troubling to me that the taxpayer does not get any judicial review until the decision has been made,” Sardar said.
An additional concern with passport certification, Sardar said, is that “a lot of people are going to believe
mistakenly if you're certified, you can pay to below $50,000, and the problem goes away. This is not the case—
once you're certified, you only get uncertified if you solve the problem,” he said.
“Long term, my instinct is this is not going to be successful,” Sardar said. “There may be outliers. But even if this works as intended, it's still not good enough.”