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June 19, 2016


Passport denial for tax debt, part 1: a Q & A on the IRS’s new tool

Uncle Sam has been hard up for cash for many years. On a national level, the scale is staggering: an estimated deficit this year for the U.S. government of $544 billion.

Not surprisingly, with so much red ink, various proposals to put more collection capabilities in the IRS’s toolkit have come forth. After all, the revenue is sorely needed.

In this two-part post, we will inform you about one such proposal that has become the law of the land: denying or revoking passports based on delinquent taxes.

When did this happen?

Passport denial for substantial unpaid federal taxes was proposed by two U.S. senators (Orrin Hatch and Harry Reid) in 2013 and again 2014. It didn’t pass either of those times.

In December 2015, however, Congress did approve a passport denial provision that was slipped into a big transportation bill.

What level of tax debt does it apply to?

The new provisions on passport denial that Congress added to the Internal Revenue Code apply to federal tax debt that is “seriously delinquent.” In monetary terms, this means debt in excess of $50,000, including interest and penalties.

Where did Congress get this idea?

The passport denial program for tax debt appears to be modeled after a similar program that the Department of Health and Human Services use to deny or revoke passports of people with unpaid child support obligations.

How will the program work?

We will discuss the nuts and bolts of how the program is supposed to work in part two of this post.

Tax Controversy