Baucus, Grassley say linking tax collection, passports needs 'careful study'

Two key senators who requested a report on linking passport issuance and tax collection have said Congress should proceed carefully on the issue. 

The Government Accountability Office released a report this week that found about 224,000 people who were issued passports during the 2008 fiscal year owed more than $5.8 billion in taxes. 

GAO also noted the IRS had identified $330 billion in unpaid taxes by the end of fiscal 2010 and that Congress could take steps to allow the State Department to deny passports to people who owe taxes.

The two senators who requested the study — Max Baucus (D-Mont.), the chairman of the Finance Committee, and Chuck Grassley (R-Iowa), the ranking member of the Judiciary Committee — said in a Tuesday release that the report’s ideas would need “careful study” in order to square the need to boost tax compliance with taxpayer privacy.  

“People who don’t pay the taxes they owe put a significant strain on programs we count on like Medicare and Social Security, so every proposal to improve tax compliance deserves evaluation,” Baucus said in a statement. "Taxpayers have a right to privacy, and that’s something we need to protect, so we need to carefully weigh each idea of how to improve tax compliance.”

“It’s disturbing to see jet-setting gamblers and Ponzi schemers getting U.S. passports when they owe millions of dollars in taxes. At the same time, there’s a longstanding precedent of taxpayer privacy and freedom to travel that Congress would need to study carefully before changing,” said Grassley, who is also a member of the Finance Committee.