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Another Travel Ban: IRS Moves To Revoke Passports For Unpaid Taxes

by | Feb 6, 2017

Another Travel Ban: IRS Moves To Revoke Passports For Unpaid Taxes

by | Feb 6, 2017

President Trump’s executive order on travel may be generating big protests, but an IRS missive on travel and passports may not go down too well either. More than a year ago, in H.R.22, Congress gave the IRS a new weapon to collect taxes. Tax code Section 7345 is labeled, “Revocation or Denial of Passport in Case of Certain Tax Delinquencies.” The law isn’t limited to criminal tax cases, or even cases where the IRS thinks you are trying to flee. The idea of the law is to use travel as a way to enforce tax collections. It was proposed and rejected in 2012. But by late 2015, Congress passed it and President Obama signed it.

Now, over a year later, the IRS has finally released new details on its website. If you have seriously delinquent tax debt, IRS can notify the State Department. The State Department generally will not issue or renew a passport after receiving certification from the IRS. The IRS has not yet started certifying tax debt to the State Department. The IRS says certifications will begin in early 2017, and the IRS website will be updated to indicate when this process has been implemented.

Here is the new information from the IRS. Seriously delinquent tax debt is an individual’s unpaid, legally enforceable federal tax debt totaling more than $50,000 (including interest and penalties, but subject to an inflation adjustment) for which:

  • A notice of federal tax lien has been filed and all administrative remedies under IRC § 6320 have lapsed or been exhausted or
  • A levy has been issued

Some tax debt is not included in determining seriously delinquent tax debt even if it meets the above criteria. It includes tax debt:

  • Being paid in a timely manner under  an installment agreement entered into with the IRS
  • Being paid in a timely manner under an offer in compromise accepted by the IRS or a settlement agreement entered into with the Justice Department
  • For which a collection due process hearing is timely requested in connection with a levy to collect the debt
  • For which collection has been suspended because a request for innocent spouse relief under IRC Section 6015 has been made

Before denying a passport, the State Department will hold your application for 90 days to allow you to:

  • Resolve any erroneous certification issues
  • Make full payment of the tax debt
  • Enter into a satisfactory payment alternative with the IRS

There is no grace period for resolving the debt before the State Department revokes a passport.

Read the rest at Forbes.

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