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Late fees. Fines. Wage garnishment. Even prison time. There are plenty of well-known penalties for failing to pay your federal income taxes. Add losing your passport to the list.
If you are seriously delinquent tax debt, the IRS can now report that debt to the State Department, who can in turn either revoke your passport or refuse to issue you one. So what kind of debt classifies as "seriously delinquent"? And how long before the IRS clips your international travel wings?
The passport law was actually signed by Obama in 2015, but the IRS just recently released details on how and when it will be enforced. According to the IRS's website, the IRS can certify seriously delinquent tax debt to the State Department starting in early 2017. Once that certification happens, the State Department may not issue or renew your passport, and in some cases may revoke it.
The IRS considers any unpaid debt totaling over $50,000 (including interest and penalties) to be serious, and will certify your debt if all other efforts to collect have been exhausted. If you're paying down a prior tax debt under an installment or settlement agreement with the IRS, or still in the process of contesting your debt, however, that won't be reported to the State Department. So if you owe a big chunk of change in unpaid taxes, you may want to get on an installment plan ASAP.
This doesn't mean your passport is revoked automatically if you file your taxes late. Even if the IRS certifies your tax debt, the State Department will notify you of any impending action on your passport. If you're applying for a passport, the State Department will hold your application for 90 days to allow you to pay off your tax debt or sort out a payment plan or settlement with the IRS.
There is no such grace period before which the State Department can revoke an existing passport, but you may be able to obtain a limited passport for return travel to the United States. You can also challenge the revocation in court.
If you're seriously behind on your tax debt, contact an experienced tax attorney today, before your international travel plans get grounded.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.