The new program is set to be implemented over the next few months, and currently only those with ‘seriously delinquent tax debt’ are in the crosshairs. An individual must have $50,000 worth of tax debt to be subject to revocation, but that number can easily be adjusted downward in the future. Once identified by the IRS, a certification is sent to the State Department to begin the process. The taxpayer is then informed of the action taken against them, but any recourse from there is extremely limited. This policy blatantly targets citizens living outside of the country who may not have filed with the IRS while earning an income abroad.
The United States is one of only two countries in the world that entitles itself to tax citizens while they work in other countries. These regulations were bolstered by FACTA legislation, which requires all foreign financial institutions to report account information on Americans. The additional risks that come with having to deal directly with the U.S. government have led many foreign banks to deny American clients altogether.