New Tax Provisions Enacted in Recently Passed Act

| 12/10/2015

A number of tax provisions are included in the Surface Transportation Reauthorization and Reform Act of 2015, which was signed by President Barack Obama on Dec. 4, 2015. Following are some of the changes:

Denial or Revocation of Passports for Delinquent Individual Taxpayers
Individuals with unpaid taxes in excess of $50,000 for which a lien has been filed will not be eligible to obtain passports under the new IRC Section 7345. The legislation also provides that the IRS is required to notify the State Department of delinquent taxpayers, and the State Department will be authorized to revoke an individual’s passport based on the tax delinquency.

IRS Use of Private Debt Collectors
The legislation mandates that the IRS use private debt collectors to collect unpaid taxes. The mandate applies to unpaid taxes if any of the following apply:

  • At any time after assessment, the IRS removes the tax owed from the active inventory for lack of resources or inability to locate the taxpayer
  • More than one-third of the period of the applicable statute of limitations has lapsed and the taxes owed have not been assigned for collection to an IRS employee
  • In the case of taxes owed that have been assigned for collection, more than 365 days have passed without interaction with the taxpayer or a third party for purposes of furthering the collection of the tax

Repeal of Recently Enacted 3.5-Month Automatic Extension for Benefit Plans
Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, enacted on July 31, 2015, provided employee benefit plans a 3.5-month extension period to file returns starting with the 2016 tax year. The Surface Transportation Reauthorization and Reform Act of 2015 repeals the 3.5-month extension period and reverts to the 2.5-month extension period that previously had been in effect.


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