In recent years, the federal government has been cracking down on individuals with seriously delinquent tax debts by revoking or limiting their passports. This enforcement mechanism, which has been in place since 2018, serves as a last resort to collect unpaid tax levies according to experts. Should taxpayers fail to resolve their debt, they may face significant consequences when it comes to international travel.
The consequences of having a seriously delinquent tax debt are severe for travelers. The State Department will not issue a new passport and might revoke or limit an existing one in cases of serious delinquency. This means that individuals who owe a large federal debt, more than $62,000 in 2024, may find themselves unable to travel overseas until they have resolved their tax obligations. Those who frequently travel abroad for business or personal reasons may be forced to return to the U.S. until their tax case is resolved, causing significant disruptions to their travel plans.
According to Todd Whalen, a CPA based in Denver, tax enforcement efforts involving passports have been ramping up over the past three years. The government’s increased focus on revoking passports as a means of collecting tax debts has been effective in getting taxpayers to address their outstanding balances. Whalen shared a story of a client who only found out his passport had been revoked while at the airport, highlighting the real and immediate impact of this enforcement measure.
Revoking a passport is not the government’s first line of defense when it comes to collecting overdue tax debts. The IRS must have exhausted all other typical collection activities before resorting to passport revocation. Various courts have upheld the federal government’s authority to revoke passports in order to collect tax debts as constitutional, citing examples such as Franklin v. United States and Maehr v. United States Department of State. These cases have established that revoking passports is a legally allowable method for the government to compel taxpayers to address their outstanding debts.
When the IRS certifies a debt as seriously delinquent and alerts the State Department, the taxpayer will receive a notice outlining the potential implications of this classification. If an individual applies for a passport and has a seriously delinquent tax debt, the State Department will generally deny and close the application unless the taxpayer takes steps to address the debt. This could involve paying the balance in full, entering into a payment plan, or reaching a compromise agreement with the IRS. Taxpayers are given an opportunity to resolve their accounts and avoid passport cancellation by contacting the IRS within 30 days of receiving a notice.
Despite the notification process, some taxpayers are caught off guard when their passport is denied while traveling. Incorrect addresses, especially when taxpayers have moved, can result in missed notices from the IRS leading to sudden passport denial at airports. This lack of awareness of their outstanding tax debt can create significant challenges for individuals looking to travel internationally, emphasizing the importance of staying informed and proactive in addressing tax obligations.
The federal government’s crackdown on seriously delinquent tax debts through passport revocation serves as a powerful incentive for taxpayers to address their outstanding balances. Understanding the consequences of ignoring tax bills and taking proactive steps to resolve tax debts can prevent disruptions to international travel and financial stability.