Daniel Gray CPA
Unpaid Tax Bill could result in Your US Passport Being Revoked
The H.R. 22, Fixing America’s Surface Transportation Act (FAST Act) highway funding bill was signed by President Obama on December 4, 2015, which now gives the US government the right to revoke or deny the passports of US persons who owe more than USD50,000 in federal taxes (including penalties and interest).
The new law adds a new Internal Revenue Code (section 7345) which authorizes the Treasury Secretary to certify, to the Secretary of State (Secretary), that a taxpayer has a “seriously delinquent tax debt'”. A “seriously delinquent tax debt” is greater than USD50,000 and one for which the IRS has either filed a lien or levy. Upon receiving the certificate, the Secretary can deny, revoke, or limit the taxpayer’s US passport. The notice must spell out that the taxpayer is entitled to file a lawsuit in the US Tax Court or a federal district court to challenge this certification.
All the existing remedies for addressing an IRS lien or levy continue to apply. Therefore, this new provision of denying a passport will not apply to taxpayers who have entered into installment agreements or offers-in-compromise, or who have requested collection due process hearings or innocent spouse relief.