Could Your Passport Be Revoked If You Owe Taxes To The IRS?
H.R.22, which was signed into law, has added another tool to the IRS’ collection arm. The Act adds Section 7345 “Revocation or Denial of Passport in Case of Certain Tax Delinquencies.”
The State Department could revoke, deny or limit passports for anyone the IRS certifies as having a seriously delinquent tax debt. In order to travel outside the US, the taxpayer would have to pay their balance below the limit.
As of January of 2016, the State Department has started blocking Americans with “seriously delinquent tax debts”. Administrative details about how all this will work are scant. But in all likelihood, it will mean no new passports or renewals for those with tax debt in excess of the limit. It could even mean the State Department will rescind existing passports of people who fall into this category.
What Is A “Seriously Delinquency Tax Debt”?
“Seriously Delinquent Tax Debt means an outstanding debt of $50,000 or greater for which a notice of lien has been filed in public records pursuant to section 6323 or a notice of levy has been filed pursuant to section 6331, except that such term does not include:
1. A debt that is being paid in a timely manner pursuant to an agreement under section 6159 or 7122, and
2. A debt with respect to which collection is suspended because a collection due process hearing under section 6330, or relief under subsection (b), (c), or (f) of section 6015, is requested or pending.
The $50,000 shall be adjusted for inflation.
If any amount as adjusted under the preceding sentence is not a multiple of $1,000, such amount shall be rounded to the next highest multiple of $1,000.
How Does Notification Occur?
If the Secretary receives certification by the Commissioner of Internal Revenue that any individual has a “seriously delinquent tax debt” in an amount in excess of $50,000, the Secretary shall transmit such certification to the Secretary of State for action with respect to denial, revocation, or limitation of a passport pursuant to section 4 of the Act.
The Secretary shall, upon receiving a certification described in section 7345, disclose to the Secretary of State return information with respect to a taxpayer who has a seriously delinquent tax debt described in such section. Such return information shall be limited to;
the taxpayer identity information with respect to such taxpayer, and
the amount of such seriously delinquent tax debt
Are There Any Exceptions?
There is an administrative exception, allowing the State Department to issue a passport in an emergency or for humanitarian reasons. How that will work is not clear, nor is the amount of time it will take to get special allowance.
You would still be able to travel if your tax debt is being paid in a timely manner, as under a signed installment agreement or the debt is under dispute pending a Collection Due Process Hearing or Tax Court.
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