Travelers need to be aware that failing to pay a substantial tax bill can result in the federal government revoking their passport. This consequence has become more common in recent years as the IRS and Treasury Department are mandated by federal law to notify the State Department of any American with a “seriously delinquent tax debt.” This debt amount, which was more than $62,000 in 2024, includes not only the federal tax liabilities but also penalties and interest. The State Department has the authority to refuse to issue a new passport or to revoke or limit an existing one in cases of severe delinquency. This enforcement mechanism has been in place since 2018 and is typically utilized as a final effort to collect unpaid tax debts.
Consequences of Passport Revocation
If an individual’s tax debt remains unpaid, they may face various consequences, such as being unable to travel overseas until the debt is resolved. This restriction can affect expats and business travelers who may have to return to the US until their tax case is settled. Revoking a passport is considered a last resort and is intended to grab the attention of individuals who have been negligent in paying their taxes. The inability to travel internationally can serve as a strong motivator for individuals to contact the IRS and address their outstanding tax liabilities.
The demand for international travel has increased as the Covid-19 pandemic has subsided, leading to a record number of passport applications in recent years. Tax enforcement actions related to passports have also intensified over the past few years, with more individuals experiencing passport revocation or denial due to tax debts. Tax professionals have observed a growing trend in the use of passport revocation as a means to compel individuals to settle their tax obligations.
Revoking a passport is not the initial method employed by the government to collect overdue tax debts. The IRS must have exhausted other collection activities before resorting to such drastic measures. Various courts have upheld the government’s authority to revoke passports in order to collect unpaid taxes as constitutional. Cases such as Franklin v. United States and Maehr v. United States Department of State have served as examples of the government’s legal ability to revoke passports for tax debts.
Notification Process and Resolution Options
Before revoking a passport, the IRS notifies the taxpayer of their seriously delinquent tax debt and outlines the potential consequences. Individuals have the opportunity to resolve their tax issues by paying the balance in full, entering into a payment plan, or reaching a compromise agreement with the IRS. The State Department can limit the use of a passport to return travel to the US, preventing individuals from being stranded abroad. Taxpayers receive a notification letter before passport revocation, giving them a chance to resolve the matter to avoid travel disruptions.
In some cases, individuals are caught off guard when their passport is denied as a result of unpaid taxes. This can happen if the IRS has outdated or incorrect contact information for the taxpayer, leading to missed notifications. Travelers may only become aware of their outstanding balance when they are already at the airport, ready to travel internationally. It is crucial for taxpayers to stay informed about their tax obligations and address any issues promptly to avoid travel disruptions.