The State Department May Revoke Your US Passport If You Owe Back Taxes

In December of 2015, Congress passed and President Obama signed a law into effect that could revoke an American passport if then owed over $50,000 in back taxes. The bill received bipartisan support because I believe, it was buried in a larger bill that primarily addressed fixing our public roads, called the FAST Act, Fixing Americas Surface Transportation Act Public Law 114-94.

In February 2018, the IRS started giving the State Department information on delinquent taxpayers.  The following paragraphs are direct quotes from the IRS:

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

Upon receiving certification, the State Department shall deny your passport application and/or may revoke your current passport. If your passport application is denied or your passport revoked and you are overseas, the State Department may issue you a limited validity passport good only for direct return to the United States.

Certification Of Individuals With Seriously Delinquent Tax Debt

Seriously delinquent tax debt is an individual’s unpaid, legally enforceable federal tax debt totaling more than $51,000 (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

Seriously delinquent tax debt is limited to liabilities incurred under Title 26 of the United States Code and does not include debts collected by the IRS such as the FBAR Penalty and Child Support.

Some tax debt is not included in determining seriously delinquent tax debt even if it meets the above criteria. It includes tax debt:

• Being paid timely with an IRS-approved installment agreement
• Being paid timely with an offer in compromise accepted by the IRS, or a settlement agreement entered with the Justice Department
• For which a collection due process hearing is timely requested regarding a levy to collect the debt
• For which collection has been suspended because a request for innocent spouse relief under IRC § 6015 has been made

Additionally, a passport won’t be at risk under this program for any taxpayer:

• Who is in bankruptcy
• Who is identified by the IRS as a victim of tax-related identity theft
• Whose account the IRS has determined is currently not collectible due to hardship
• Who is located within a federally declared disaster area
• Who has a request pending with the IRS for an installment agreement
• Who has a pending offer in compromise with the IRS
• Who has an IRS accepted adjustment that will satisfy the debt in full

Certification will be postponed while an individual is serving in a designated combat zone or participating in a contingency operation.

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 a satisfactory payment arrangement with the IRS

End of IRS Cites

While this is still a new law in uncharted territory, I may be able to help and/or appeal taxpayers that may find themselves in this situation.