Travelers beware – the federal government has the power to revoke your passport if you have a seriously delinquent tax debt. This is a situation that has become more common in recent years, with the IRS notifying the State Department if an individual has ignored a federal tax debt exceeding $62,000 in 2024.
The threshold for a seriously delinquent tax debt includes total federal tax liabilities, penalties, and interest accumulated by an individual over time. The State Department has the authority to withhold a new passport application or revoke an existing one in cases of serious tax delinquency. This enforcement mechanism, which has been in effect since 2018, is used as a final attempt to recover unpaid tax levies.
Consequences for Taxpayers
The consequences of having a revoked passport due to tax debts can be severe. Travelers may be unable to take trips abroad until they resolve their debt, limiting their ability to travel for leisure, work, or family reasons. Expats and business travelers may be required to return to the U.S. until their tax case is resolved, disrupting their plans and causing inconvenience.
Tax Enforcement Efforts
Tax enforcement efforts involving passports have increased in recent years, with cases of revoked passports becoming more common. Individuals have been caught off guard at airports, realizing their passport has been revoked right before a planned trip. This method has proven to be effective in encouraging individuals to address their tax debts and contact the IRS for resolution.
While revoking a passport is a drastic measure, it is not the government’s first resort in collecting overdue tax debts. The IRS must have exhausted all other collection activities before resorting to passport revocation. Various court cases have upheld the government’s right to revoke passports for tax debts as constitutional, ensuring that individuals fulfill their tax obligations.
Notification and Resolution
When the IRS certifies a debt as seriously delinquent, and alerts the State Department, the taxpayer receives a notice outlining the potential implications of this classification. Individuals have the opportunity to resolve their debt by paying in full, setting up a payment plan, or reaching a compromise with the IRS. Failure to address the debt may result in passport denial when applying for a new one.
Unexpected Challenges
In some cases, taxpayers are caught by surprise when their passport is denied while traveling. This could be due to incorrect address information on file with the IRS, resulting in missed notifications and lack of awareness of the outstanding tax debt. This situation can lead to individuals being stranded or facing difficulties when attempting to leave the country.
Travelers must be aware of the potential consequences of ignoring tax debts, as they could result in revoked passports and travel restrictions. Addressing tax obligations in a timely manner is crucial to avoid disruption in travel plans and to comply with federal tax laws. Being proactive in resolving tax debts can prevent unnecessary complications and ensure smooth travel experiences for individuals.