As we’ve written about before, a new law passed on December 4, 2015 that gives the Secretary of State the authority to refuse or revoke passports to “seriously delinquent” taxpayers. While the program has been slow to roll out, we do have some passport revocation updates.
What we know so far
The IRS will be submitting certifications of “seriously delinquent” taxpayers to the Secretary of the Treasury, who will then pass along these certifications to the Secretary of State. The Secretary of State will then be required to deny such person a passport if they are applying, or revoke a passport that has already been issued. What makes a taxpayer “seriously delinquent”? It is someone who owes over $50,000 in taxes – including penalties and interest.
We’ve had people call us here at the law firm saying things like “I think my passport has been revoked!” We do know that so far, the system to revoke passports for back taxes owed has not officially been implemented. When it is, the first thing that will happen is that you will receive a notice from the Secretary of the State. The Secretary of State is also authorized to make exceptions to these rules for “emergency or humanitarian” purposes but they have not outlined those parameters as of yet.
Update
The IRS updated Publication 54 "Tax Guide for U.S. Citizens and Resident Aliens Abroad" a few days ago. The very first section, "What's New," talks about the passport law. They say:
Denial or revocation of United States passport. On December 4, 2015, as part of the Fixing America’s Service Transportation (FAST) Act, Congress enacted section 7345 of the Internal Revenue Code, which requires the Internal Revenue Service to notify the State Department of taxpayers certified as owing a seriously delinquent tax debt. The FAST Act generally prohibits the State Department from issuing or renewing a passport to a taxpayer with seriously delinquent tax debt. Seriously delinquent tax debt means an unpaid, legally enforceable federal tax debt of an individual totaling more than $50,000 for which, a Notice of Federal Tax lien has been filed and all administrative remedies under IRC section 6320 have lapsed or been exhausted, or a levy has been issued. If you are individually liable for tax debt (including penalties and interest) totaling more than $50,000 and you do not pay the amount you owe or make alternate arrangements to pay, we may notify the State Department that your tax debt is seriously delinquent. The State Department generally will not issue or renew a passport to you after we make this notification. If you currently have a valid passport, the State Department may revoke your passport or limit your ability to travel outside the United States. Additional information on passport certification will be available in February 2017 at www.irs.gov/passports.
As of this writing, the link www.irs.gov/passports is currently just a landing page. Be sure to check back to that link if you are concerned that this law may affect you.
If you know you have a tax issue and are concerned that this law may affect you, contact us to schedule a free, confidential consultation.
If you're unsure if you have a tax debt or are unsure if your debt is over the $50,000 threshold, you can reach out to us as well. We offer a service where we can contact the IRS on your behalf to find out everything the IRS thinks about you. Learn more about this service here. It's a great option, as contacting the IRS yourself may raise red flags.
IRSMedic, the Law Offices of Parent & Parent LLP – Info@IRSMedic.com, or 888-727-8796.
