Under a 2015 law, the U.S. Department of Treasury must notify the U.S. Department of State of U.S. citizens with seriously delinquent tax debts. This process requires the IRS to identify those individuals and certify the identities and tax debts to the Department of Treasury. The IRS is also required to contemporaneously notify the individuals.
After receiving the certification, the Department of State will deny passport applications of affected individuals and may revoke or limit existing U.S. passports. The Department of State can make exceptions in cases of "emergency circumstances or for humanitarian reasons."
A seriously delinquent tax debt is an unpaid, legally enforceable federal tax liability in excess of $50,000 (adjusted for inflation) if either:
Consequences and Tips for U.S. Passport Holders
Limiting or revoking passports, as well denying applications, will cause significant hardship for U.S. citizens living outside of the United States, as well as for frequent travelers.
Any type of federal tax liability (including interest and penalties) counts toward the $50,000 threshold, which is determined by a taxpayer's total cumulative tax debt (rather than a per year amount).
It’s important to note that as many federal tax penalties relate to the failure to file IRS forms reporting non-U.S. assets, U.S. citizens with assets and connections outside the United States could be among those most affected.
Taxpayers need to review IRS notices and timely respond to avoid becoming delinquent by failing to respond. Individuals resident outside of the United States and frequent travelers should ensure that they have reliable arrangements in place for receiving and responding to IRS notices.
After receiving the certification, the Department of State will deny passport applications of affected individuals and may revoke or limit existing U.S. passports. The Department of State can make exceptions in cases of "emergency circumstances or for humanitarian reasons."
A seriously delinquent tax debt is an unpaid, legally enforceable federal tax liability in excess of $50,000 (adjusted for inflation) if either:
- a levy has been issued to collect the debt; or
- a notice of federal tax lien has been filed and the taxpayer's administrative remedies have lapsed or have been exhausted.
Consequences and Tips for U.S. Passport Holders
Limiting or revoking passports, as well denying applications, will cause significant hardship for U.S. citizens living outside of the United States, as well as for frequent travelers.
Any type of federal tax liability (including interest and penalties) counts toward the $50,000 threshold, which is determined by a taxpayer's total cumulative tax debt (rather than a per year amount).
It’s important to note that as many federal tax penalties relate to the failure to file IRS forms reporting non-U.S. assets, U.S. citizens with assets and connections outside the United States could be among those most affected.
Taxpayers need to review IRS notices and timely respond to avoid becoming delinquent by failing to respond. Individuals resident outside of the United States and frequent travelers should ensure that they have reliable arrangements in place for receiving and responding to IRS notices.