Effective January 1 - If You Owe Taxes Your Passport May Be Revoked

A new law set to go into effect in January would deny or revoke passports for taxpayers who owe the U.S. government more than $50,000, according to the Wall Street Journal. It is part of a highway-funding bill, H.R. 22, that Congress is expected to pass it in early December.

According to estimates by the Joint Committee on Taxation, the measure is expected to raise $398 million over 10 years. It is unclear how many Americans abroad would be affected, but the Journal noted that a report issued in September by the Treasury Inspector General for Tax Administration, or Tigta, a watchdog agency, found that the IRS sent 855,000 notices to U.S. citizens abroad in 2014.

Although it sounds like a pretty reasonable law, it may put U.S. expatriates at risk and the employers who rely on expats to conduct business on their behalf.

Earlier this month, the Americans Citizens Abroad, a U.S. expat group, wrote to Congress strongly opposing the inclusion of the Passport Revocation Provision stating that "It discriminates against Americans abroad who, unlike Americans living in the United States, are overwhelmingly reliant upon their U.S. passports in their everyday lives."

Whereas U.S. expats may already seek independent professional advice from cross-border experts to help with their personal financial affairs, this new mandate may result in a deeper dialogue between the expat and the employer as a prerequisite for resolution of any potential disturbance.

Mitigating the risk through pre-emptive policies and measures will be critical.