IRS issues guidance on revocation of passport for unpaid taxes

Falling behind in tax obligations can lead to more than just fines — it can result in the revocation of your passport. The Internal Revenue Service (IRS) recently published some guidance on this penalty, noting the agency has the authority to deny or revoke passports to those who are delinquent in tax payments.

How does the IRS have this authority? The Fixing America’s Surface Transportation (FAST) Act granted this power. 

This law added a new section which requires the Department of Treasury to notify the Department of State in the event an individual with outstanding tax obligations applies for a passport. The law allows for denial of a passport application as well as limitations or revocation of a previously issued passport.

Who is at risk for a revoked, limited or denied passport? This penalty can apply for those with “seriously delinquent” tax debts. “Seriously delinquent” is defined in the law as those with a debt over $50,000.

How can taxpayers avoid this penalty? There are a number of options, including:

• Remain in compliance with tax laws. It is important to comply with tax laws and pay off tax debt in a timely manner.
• Pay off the debt. The IRS urges taxpayers to pay off delinquent tax bills. The taxpayer could pay off the debt in whole or use an alternate method. This can include an offer in compromise or installment payments.
• Address concerns. If you feel the tax obligation was issued in error, take steps to resolve the issue. Legal recourse is available in the event the tax is issued in error.