Federal Passport Revocation: A Consequence for Ignoring Significant Tax Debts

There is an increasing trend of the federal government taking a hard stance on unpaid federal tax debts, leading to serious repercussions for U.S. citizens who neglect their financial obligations. Among the most drastic measures now being implemented is the potential for the State Department to revoke or deny a U.S. passport for individuals with a "seriously delinquent tax debt," which can now exceed $62,000 in total federal tax liabilities and penalties.

Implications of Delinquent Tax Debt

The law mandates that the IRS and the Treasury Department must inform the State Department if an American citizen has a "seriously delinquent tax debt." This encompasses an aggregate total federal tax liability, including penalties and interest. The State Department is then compelled to act on the IRS notification, potentially leading to the revocation or limitation of a passport.

Sirius Consequence and Law Enforcement

The State Department typically reserves this enforcement mechanism as a final attempt to collect unpaid taxes. For travelers, the implications can be severe. Failure to settle these debts could result in being unable to travel internationally until the tax matter is resolved. This situation can be particularly problematic for American citizens living abroad or those traveling for business, as they may be forced to return to the U.S. indefinitely until their tax issues are addressed.

Collecting Tax Debts through Travel Restrictions

The use of passport restrictions as a means to collect taxes has become more prevalent in recent years, particularly with the lifting of Covid-19 travel restrictions leading to a surge in passport applications. The State Department reported that around 21.6 million U.S. passports were applied for during the fiscal year 2023 - the highest number on record. This highlights the potential impact of passport revocations on a significant portion of the population.

Legal Precedents and IRS Notification

Legal experts affirm the constitutionality of the federal government's ability to revoke passports to collect tax debts. The IRS must first exhaust all standard collection activities, including notifying the taxpayer about a federal tax lien, before resorting to passport revocation. The State Department does not immediately revoke a passport but first mails a notice to the taxpayer outlining the potential consequences of their delinquent tax status.