IRS Passport Revocation: A Last Resort for Collecting Overdue Taxes

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The IRS has a formidable tool in its arsenal to collect overdue taxes: revoking your passport. Travelers should take heed, as the federal government may take away this privilege if a substantial tax bill is ignored. Experts have noted that this method of enforcement has become increasingly common in recent years, targeting those with significant delinquent tax debts.

The Mechanics of Passport Revocation

Under federal law, the IRS and the Treasury Department must inform the State Department when an individual has a “seriously delinquent tax debt.” For 2024, this means a federal tax debt exceeding $62,000, including penalties and interest. The IRS typically uses passport revocation as a last resort to encourage tax compliance. 

“If someone owes a significant amount in federal taxes and ignores their obligation, the IRS may ask the State Department to revoke their passport,” explained Troy Lewis, a certified public accountant and tax professor at Brigham Young University. “How do you get rich folks’ attention regarding paying their taxes? Just make sure they can’t summer in Europe,” Lewis added.

A Growing Trend in Tax Enforcement

The demand for travel has surged following the decline of the Covid-19 pandemic, making passport revocation a more noticeable issue. “This is becoming more and more of a big deal,” said Todd Whalen, founder of Advanced Tax Solutions, a firm that helps individuals and businesses resolve tax debts. Whalen shared a story of a client who only realized his passport had been revoked when he tried to fly to Mexico for his son’s high school graduation. “It works,” Whalen said about this enforcement method. “It gets people to call [the IRS].”

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Legal and Practical Aspects

For the IRS to take such a step, all other collection methods must have been “exhausted.” This means the taxpayer must have failed to respond to previous IRS notices, such as a federal tax lien. Courts have upheld the federal government’s ability to revoke passports as constitutional, as demonstrated in recent cases like Franklin v. United States and Maehr v. United States Department of State.

Available Remedies for Affected Travelers

The State Department does not revoke a passport without warning. When the IRS flags a debt as seriously delinquent, it sends a notice—CP508C—to the taxpayer, detailing the consequences. This notice gives individuals the opportunity to address their tax issues before any action is taken on their passport.

“The IRS looks at various factors, including taxpayer noncompliance in the past and failure to cooperate,” noted Virginia La Torre Jeker, an attorney specializing in U.S. international tax law. If someone is already overseas, the State Department can restrict the passport’s use solely for return travel to the United States, preventing individuals from being stranded abroad.

Passport revocation is a serious consequence of not meeting tax obligations. This measure serves as a strong deterrent and a way for the government to enforce tax compliance effectively. As Troy Lewis pointed out, taking away the privilege of travel can get taxpayers to act. If you find yourself in a tax bind, addressing your obligations promptly can save you from the inconvenience and frustration of having your passport revoked. Always keep your tax affairs in order to avoid such extreme measures.

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