Ignoring a big tax bill can have serious consequences, especially for travelers. The federal government has the authority to revoke a passport if an individual has a “seriously delinquent tax debt.” This debt threshold includes the aggregate total federal tax liabilities, penalties, and interest levied against an individual, which is adjusted annually for inflation. The State Department generally won’t issue a new passport or may revoke or limit an existing one in cases of serious delinquency. This enforcement mechanism, which has been in place since 2018, is used as a last-ditch effort to collect unpaid tax levies.
The consequences of having a passport revoked due to unpaid tax debts can be significant. Travelers may not be able to take trips overseas until they resolve their debt. This can be particularly problematic for expats and those who travel abroad for business, as they may be required to return to U.S. soil indefinitely until their tax case concludes. Revoking a passport is considered a step of last resort, and it is aimed at getting individuals to pay their overdue taxes.
Tax enforcement efforts involving passports have ramped up over the past few years, with more cases being reported. Despite not providing annual statistics on passport revocations or denials, the IRS and State Department consider this enforcement mechanism to be an effective way to get individuals to settle their tax debts. It’s increasingly common for taxpayers to have overdue tax debts that exceed the $62,000 threshold, leading to potential passport revocation.
Passport revocation isn’t the government’s first method for collecting overdue tax debts. The IRS must have exhausted all other typical collection activities before revoking a passport. Various courts have upheld the federal government’s ability to revoke passports in order to collect tax debts as constitutional. The government must notify individuals of their seriously delinquent tax debt and provide them with opportunities to settle their debts before revoking their passport.
It’s important for individuals to stay informed about their tax obligations and address any issues promptly to avoid unexpected passport revocations. Sometimes, individuals may not be aware of their overdue tax debts until they attempt to travel and discover that their passport has been revoked. To prevent such scenarios, it’s crucial to maintain updated contact information with the IRS and State Department to receive notifications about any outstanding tax debts.