Those who have what the IRS refers to as “seriously delinquent tax debt” may face the revocation of their passport. Effective January 2018, the IRS published procedures which allow officials to enforce Internal Revenue Code section 7345. This section gives the authority to and requires the State Department to deny applications for a passport for those who have delinquent debts. This also includes the revocation of you current US passport.
According to the IRS, “Seriously Delinquent Tax Debt” refers to those with unpaid federal tax debt equaling more than $51,000. This amount includes all penalties and interest. Also, to be considered seriously delinquent tax debt, a notice of federal tax lien must be filed, as well as all collection attempts must be exhausted such as levy and garnishment.
There are some tax debts that may be more than $51,000, but not considered seriously delinquent. For example, a revocation of passport will not occur if the taxpayer has an active IRS-approved installment agreement and is current with the payment terms. The State Department cannot deny an application or revoke someone’s passport if an offer in compromise has been field or accepted by the IRS, a hearing for a levy has been set or collection of the debt has been suspended.
Passports may also not be at risk for those who fall within certain circumstances which caused them to not pay their tax debt. These circumstances may include being a victim of tax-related identity theft, filing bankruptcy, determined not collectible due to economic hardship or located in a federally declared disaster area.
Should a taxpayer be affected by a revocation of passport, he or she will be notified by the IRS and the State Department in writing. This notice will be sent to the last known address of the taxpayer. The passport application will be held for 90 days, giving the individual time to resolve the matter. Also, it gives time to pay the tax debt in full or set up an installment agreement with IRS.
Those traveling overseas should not worry about being stranded in a foreign country. Should a revocation of passport occur while overseas, the State Department has the authority to issue a limited validity passport. This passport is only valid for direct return to the United States.
If the entire tax bill has been paid in full, the IRS will send a reversal of certification to the State Department A reversal certification may also be sent if the debt becomes legally unenforceable or no longer seriously delinquent. In some situations, the IRS may deem the revocation was in error and will be required to send a reversal of certification to the State Department. The IRS will make this reversal within 30 days.
Individuals who plans to travel outside of the United States with seriously delinquent tax debt, should reach out to the IRS. Coming up with a plan before travel will help prevent any issues with passport revocation prior to or during traveling. Those taxpayers who are struggling with the thought of having their passports revoked may want to seek out the assistance of a tax professional who specializes in tax resolution. A tax expert can help to prevent the revocation of a passport or get reversal of certification if the passport has been already revoked.