On December 4, 2015, the President signed into law the Fixing America’s Surface Transportation Act, or FAST Act. There’s not much in there about taxes, but here are the plums hidden in the Act’s 1,300 page text:

1.     The IRS now has the authority to revoke an individual delinquent taxpayer’s passport. On page 1,113, Act adds section 7345 of the Internal Revenue Code of 1986 to provide that the State Department will comply with an IRS request that (i) a taxpayer’s passport be revoked, (ii) a taxpayer’s application for a renewal passport or a new passport be denied or (iii) a taxpayer’s passport be limited, for anyone in the U.S. with a “seriously delinquent tax debt”, defined as an assessed tax debt of $50,000 or more (other than a debt being paid on an agreed installment plan with the Service or an agreed Offer in Compromise). The dollar amount threshold is to be adjusted for inflation. The Act is silent as to whether the term “tax debt” includes interest and penalties (although it defines a receivable as an “assessment”, which would imply that such add-ons are included in the calculation) and also makes no mention of any of the administrative details for this provision. This provision was made effective upon enactment.

2.     In addition, the Act now directs the Service (not merely empowers and encourages the agency) to use outside collection agencies to collect back taxes for “inactive” accounts. An IRS receivable is defined as one of the following: (i) a receivable which the IRS has removed from its active inventory due to “lack of resources or inability to locate the taxpayer”, (i) more than one-third (1/3) of the statute has run and the receivable hasn’t been assigned to an IRS collecting Revenue Agent OR (iii) even if assigned to a Revenue Agent, more than a year has passed since interaction with the taxpayer. The exemptions from accounts given to private collection parties are (a) those for which there are pending or active offer in compromise applications and those being paid out under an installment agreement, (b) innocent spouse cases, (c) deceased taxpayers, and (d) taxpayers under the age of 18, in combat zones and alleged victims of identity theft. This has been tried twice before; both attempts failed. One wonders whether a private collector will observe the so-called “Taxpayer Bill of Rights” when exercising their collection operations, particularly when that independent collector, unlike an IRS Revenue Agent, gets paid only when collecting the outstanding liability from the taxpayer. This provision was also made effective upon enactment.