A passport is a crucial travel document that enables an individual to travel internationally. However, IRS has powers under Internal Revenue Code to initiate the process of revoking the passport of seriously delinquent tax debtors. The good news is that the said provision of law under which there is a risk of getting a passport revoked for back taxes applies only to tax debt totaling $50,000 and above. It means taxpayers with tax debts below this amount are saved the misfortune of getting passport revocation. Read the full post to understand the situations in which getting a passport revoked for tax debts is very much possible and what to do if such cancellation of your passport happens.
Passport revoked for back taxes only if you have seriously delinquent tax debt
Section 7345 of the Internal Revenue Code provides that if an individual has a “seriously delinquent tax debt,” the IRS can notify the State Department to revoke or deny the individual’s passport. A seriously delinquent tax debt is an outstanding debt that exceeds $50,000 (including penalties and interest) and for which a notice of federal tax lien has been filed or a levy has been issued. However, certain taxpayers, such as those with pending installment agreements or offers in compromise or those in the process of appealing an IRS decision, are exempt from passport revocation.
(b)Seriously delinquent tax debt
(1)In generalFor purposes of this section, the term “seriously delinquent tax debt” means an unpaid, legally enforceable Federal tax liability of an individual—
(A) which has been assessed,
(B)which is greater than $50,000, and
(C)with respect to which—
(I) a notice of lien has been filed pursuant to section 6323 and the administrative rights under section 6320 with respect to such filing have been exhausted or have lapsed, or
(ii)a levy is made pursuant to section 6331.Section
Procedure for revoking a passport
The procedure for revoking a passport for tax debt involves several steps.
- First, the IRS sends a notice informing the taxpayer of the seriously delinquent tax debt and the potential for passport revocation. The notice also provides information on how to resolve the debt.
- If the taxpayer fails to resolve the debt or enters into an agreement with the IRS, the IRS will inform the State Department of the delinquent tax debt, and the passport will be revoked or denied.
- The taxpayer will receive a final notice from the State Department informing them that their passport has been revoked or denied due to the seriously delinquent tax debt.
What happens if passport revoked for back taxes?
Once a passport is revoked, the individual must resolve the tax debt and apply for a new passport. However, before applying for a new passport, the taxpayer must receive a release from the IRS or pay the entire tax debt. Additionally, the individual must provide proof of payment or a release from the IRS when applying for a new passport.
So, what can you do if your passport is revoked for back taxes?
- The first step is to address the tax debt. This can involve working with a tax professional or contacting the IRS to set up a payment plan or negotiate a settlement. Resolving the debt as soon as possible is essential to avoid further penalties and interest and reinstate the passport.
- Once the debt is resolved, the individual must obtain a release from the IRS or provide proof of payment when applying for a new passport. This can involve contacting the IRS directly to request a release or providing proof of payment through bank records or canceled checks.
It is important to note that resolving the tax debt does not guarantee that the passport will be reinstated immediately. Revoking and reinstating a passport can take several weeks or months, and it is essential to plan accordingly if international travel is planned.
Can you challenge the revocation of the passport order?
In some cases, individuals may be able to challenge the revocation of their passports due to tax debt. This can involve proving that the debt is not seriously delinquent, that the IRS did not follow proper procedures in notifying the State Department, or that the revocation would cause undue hardship. The Taxpayer First Act, signed into law in 2019, requires the IRS to notify taxpayers in writing before certifying their seriously delinquent tax debt to the State Department for passport revocation or denial. The law also allows taxpayers to challenge the certification in court. Several court orders have favored passport holders whose passports were revoked by the IRS for tax debt.
One such case is the class-action lawsuit, “Alvarez v. Smith,” which challenged the constitutionality of the IRS’s authority to revoke passports for unpaid taxes. In 2019, a federal district court ruled in favor of the plaintiffs. It held that the IRS must provide due process protections, including notice and an opportunity to be heard, before revoking a passport for unpaid taxes.
Challenging the revocation of a passport can be a complex legal process and may require the assistance of a tax attorney or tax debt lawyer. However, it is important to note that challenging the revocation does not guarantee success, and it is often more effective to address the tax debt directly.
While the information on this site - Internal Revenue Code Simplified-is about legal issues, it is not legal advice or legal representation. Because of the rapidly changing nature of the law and our reliance upon outside sources, we make no warranty or guarantee of the accuracy or reliability of information contained herein.