The Tax Times: Another Travel Ban: Starting Next Month Your US Passport Will Be Revoked For Tax Debts!

Wednesday, March 1, 2017

Another Travel Ban: Starting Next Month Your US Passport Will Be Revoked For Tax Debts!

On December 21, 2015 we posted Have An Unpaid Tax Bill? Your US Passport Is In Jeopardy of being Revoked in 2016! where we discussed that H.R. 22, Fixing America’s Surface Transportation Act (FAST Act), which It includes amendments to the tax code that would allow authorities to revoke or deny the passport of any US taxpayer who has unpaid taxes in excess of $50,000 or who have not obtained or won’t provide a Social Security numbers which was signed by President Obama on December 4, 2015 and now gives the US government the right to revoke or deny the passports of US persons who owe more than USD50,000 in federal taxes (including penalties and interest) effective on January 1, 2016.

Now the IRS has updated it website on February 6, 2017 entitled Revocation or Denial of Passport in Case of Certain Unpaid Taxes to state that while the IRS has not yet started certifying tax debt to the State Department. Certifications to the State Department will begin in early 2017 and this webpage will be updated to indicate when this process has been implemented.

If you have seriously delinquent tax debt, IRC § 7345 authorizes the IRS to certify that to the State Department. The department generally will not issue or renew a passport to you after receiving certification from the IRS.

Upon receiving certification, the State Department may revoke your passport. If the department decides to revoke it, prior to revocation, the department may limit your passport to return travel to the U.S.

Seriously delinquent tax debt is an individual's unpaid, legally enforceable federal tax debt totaling more than $50,000* (including interest and penalties) for which a:

Notice of federal tax lien has been filed and all administrative remedies under IRC § 6320 have lapsed or been exhausted or

Levy has been issued

Before denying a passport, the State Department will hold your application for 90 days to allow you to:

Resolve any erroneous certification issues

Make full payment of the tax debt

Enter into a satisfactory payment alternative with the IRS

"There Is No Grace Period For Resolving The Debt Before The State Department Revokes A Passport."

All the existing remedies for addressing an IRS lien or levy continue to apply! Therefore, this new provision of denying a passport will not apply to taxpayers who have entered into installment agreements or offers-in-compromise, or who have requested collection due process hearings or innocent spouse relief.
US citizens living abroad should ensure that their IRS tax affairs are in order to ensure that they do not have any issues with their US passport when traveling.

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