US TAX COLLECTORS KEEPING CLOSER WATCH ON AMERICANS IN QATAR

American expats who don’t pay their taxes could have their passports revoked, if lawmakers in Washington DC approve new legislation that gives authorities the power to do so.

The new law is expected to come into effect in January and comes as the US government starts to take a closer look at the Qatar bank accounts of Americans living here.

If the legislation is approved, the State Department would be able to block Americans with “seriously delinquent” tax debts of $50,000 or more from receiving new passports, the Wall Street Journal reported. Individuals in that situation could also have their passports rescinded.

The proposed measures comes several months after Qatar and the US signed an agreement, known as the Foreign Account Tax Compliance Act (FATCA), that requires local banks to provide information about its American customers to US authorities.

While FATCA and the proposed passport measure are not directly related, financial experts say they add up to much greater scrutiny of the finances of Americans living in Qatar.

“There’s no place to hide,” James Green, area manager for financial services firm DeVere Acuma, told Doha News. “A lot of Americans are not too worried about their tax liability while they are living in Qatar. But they will be when it comes time to renew their passport.”

$200,000 threshold

The US is one of the few countries in the world that taxes the foreign earnings of its non-resident citizens. In recent years, it’s been making a greater effort to collect that money.

FACTA starts to kick in for Americans who hold US$200,000 (QR728,000) in foreign currency or other financial assets, according to the US Internal Revenue Service (IRS). Taxpayers who cross that threshold are required to complete an additional form with their tax return.

Theoretically, the US government already has a good idea of how much money Americans are keeping in Qatar.

Under the FACTA agreement signed between the US and Qatar earlier this year, local banks are required to report previously private details of their American customers to the IRS.

Already, some Americans living in Qatar say they’ve been contacted by their banks, asking them to complete additional paperwork.

Many of the country’s major financial institutions, including Qatar International Islamic Bank and Qatar National Bank, have set up new web pages with information for US customers.

Green called the “minefield” of new requirements “a massive burden” that has led to reduced banking options for Americans living in other countries in the Middle East with similar FACTA agreements with the US.

He said some have started to refuse to take on new American customers because of the resources required to process the additional paperwork, as well as concerns that a mistake could leads to financial penalties.

“As a bank, do you want to take that risk?” Green asked.

Thoughts?