Last month, members of Congress urged the State Department to “consider the unique circumstances of overseas Americans” before revoking anyone’s passport. An IRS spokesperson declined to comment on the passport rule or other specific taxpayer concerns. In October, the agency said its “offshore voluntary disclosure program,” a process for taxpayers to catch up on filing obligations, had collected more than $8 billion since 2009.
Accidental Americans
Many Americans who live abroad simply don’t know they need to file, and the IRS lacks an efficient way to notify them. “Nobody sends you a memo when you go overseas,” McKeegan said.
An unknown number of Americans don't even realize they’re U.S. citizens. Because the U.S. grants citizenship for, among other things, being born in the States, babies delivered in the U.S. to non-American parents are sometimes brought back home in diapers and learn only decades later that they need to file to the IRS every year.
Increasingly, these “accidental Americans” are discovering their citizenship the hard way, as the IRS tightens tax evasion rules regarding banks. “’Am I going to get arrested at the airport?’” McKeegan said they often ask him. “You spend the first 10 minutes talking them off the ledge.”
London Mayor Boris Johnson, who was born in the U.S., had to pay the IRS last year for capital gains on his sale of a house in north London. “I think it’s absolutely outrageous,” he said when he learned of the debt in 2014. “Why should I? I haven’t lived in the U.S. since I was five years old.”Johnson has previously said he would like to renounce his U.S. citizenship, and he's not the only one. According to Treasury Department data, the number of Americans renouncing their citizenship last year jumped 25 percent, to a record 4,279. How much of this is the fault of the IRS and its get tough campaign may remain as mysterious as the tax code.