The IRS now has the power to block passports of seriously delinquent taxpayers thanks to a law passed by Congress in 2015. In January 2018, the IRS published procedures to begin enforcement. Prior to January 2018, the IRS had not been enforcing the new law. So far this year, the IRS has been sending tens of thousands of violators’ names to the State Department, which oversees passport applications.
If you have a seriously delinquent tax debt (defined as greater than $50,000 owed with increases for inflation), it is possible that you may not be issued a U.S. passport and your current U.S. passport may be revoked. If you are overseas, you may be eligible for a limited passport good for direct return to the United States.
There are exceptions to the classification of a tax debt as “seriously delinquent”. Some of these exceptions are that if you are an installment agreement or offer in compromise, a collection due process hearing is pending, innocent spouse relief has been requested, a taxpayer is in bankruptcy, a hardship exists and the debt is currently not collectible, or active military service. Furthermore, there are provisions for notice of the certification, procedures after certification, and reversal or judicial review of certification.
As the IRS now has another tool for collection against those taxpayers traveling abroad with seriously delinquent tax debt, it is important to those taxpayers to address their situation in a timely manner. Otherwise, a passport application may be delayed or denied and an existing passport may be revoked.