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FAQ: Can the IRS deny or revoke my US Passport if I owe back taxes?

Answer: Yes. Congress passed the Fixing America’s Surface Transportation (FAST) Act on December 4th, 2015. As part of FAST, section 7345 of the US Tax Code was enacted which requires the IRS to notify the State Department of taxpayers certified as owing a seriously delinquent tax debt.
A seriously delinquent tax debt is defined as an unpaid, legally enforceable federal back tax that:

  1. Has been assessed. An assessed tax means you’ve exhausted your due process rights and the back tax is an IRS account receivable. For example, if you’re challenging a tax audit, such as in appeals or US Tax Court, then the tax is proposed, not assessed.
  2. The back tax owed exceeds $50,000 inclusive of penalties and interest. The $50,000 amount owed threshold is adjusted for inflation and has not been adjusted in the 2017 tax year.
  3. A Notice of Federal Tax Lien has been filed and your right to challenge the filing in a collection due process hearing has been exhausted or lapsed or a levy has been made after notice and demand for payment.

According to section 7345 of the US Tax Code, the term seriously delinquent tax debt excludes a tax debt that is being paid back in an IRS installment agreement, offer in compromise agreement, or for which a collection due process hearing is pending, or innocent spouse relief has been requested.

After the IRS certifies that an individual owes seriously delinquent tax debt, it must notify the State Department if the certification is found to be erroneous or the relevant debt is satisfied or ceased to be a seriously delinquent tax debt as defined above.

The IRS is changing as a result of its reduced staff. Generally speaking, the IRS used to garner attention by having an employee known as a Revenue Officer show up at your place of business or home when you owed significant back taxes. Now the IRS is using an automated collection system, in addition to Revenue Officers, that can levy bank accounts, garnish wages, and, yes, not issue or renew a passport. The IRS is beginning to grab the taxpayer’s attention by its new ability to stop the taxpayer from traveling outside of the US when there is seriously delinquent tax debt. At the Law Offices of Todd S. Unger, Esq. LLC, we can help you avoid the denial of or revocation of your passport. Contact the Law Offices to resolve your tax matter today.