iStock_passportXSmallState Department Turns Over Your Social Security Number & Location To The IRS

Non-compliant United States taxpayers living abroad are getting nervous. If an informant seeking a hefty IRS reward or FATCA doesn’t rat them out first, then the State Department will. This can happen when the non-compliant taxpayer renews his or her US passport.

Traditionally, the functions of the US Treasury and the Department of State were completely separate. However, we are seeing a continued erosion of this distinction as troubling economic times continue. The US passport renewal form mandates that the applicant supply his Social Security Number (SSN) if he has one. 

This is authorized by Internal Revenue Code Section 6039E, enacted in 1986. The legislative history to that section makes clear that over 25 years ago Congress was aware that US persons residing overseas were not filing US tax returns even though required to do so. Congress intended to increase tax compliance of US citizens living outside the United States through its enactment of this tax provision. The IRS has continued to drag its feet in promulgating Treasury Regulations that can offer more guidance. Recently, the IRS has renewed its interest in the topic. In January of 2012, the IRS withdrew old proposed Regulations that had been issued in 1992 and issued new ones dated January 26, 2012. We are still waiting for these Regulations to be finalized over one year later! Read More