WARNING: IRS ANNOUNCES PLANS FOR PASSPORT REVOCATION FOR TAXPAYERS WITH DELINQUENT TAX DEBTS

The IRS recently announces that it plans to move forward with a passport revocation program for US citizens who have outstanding federal tax liabilities of more than $50,000.  Those taxpayers are now at a substantial risk of having their US passports revoked within the next few months.  The program also provided that US citizens living abroad may be forced to return to the US until the resolve their tax liabilities.

In December of 2015, Congress enacted legislation which requires the IRS to provide the State Department a listing of all taxpayers with “seriously delinquent tax debt.” (See Section 32101 of Fixing America’s Surface Transportation (the “FAST”) Act, Pub. L. 114–94).  That term was defined in the statute to mean a tax liability in excess of $50,000, including penalties and interest.  (See 26 U.S.C. § 7345(b)).  This new legislation give the State Department the discretion to revoke currently issued passports and enables them to refuse issuance of new passports. (See 22 U.S.C. § 2714A.).

Last week, the IRS announced that it would begin sending the State Department, within the next 30 days, IRS Letter 508C, notices of certification of seriously delinquent tax liabilities. These letters will indicate the taxpayer and their last known address.

In their announcement, the IRS indicated that the State Department would begin their actions within the next 30 days.  Taxpayers can avoid revocation or non-issuance of passport by reaching a formal agreement with the IRS.  It should be noted that the 2015 legislation significantly limits a taxpayers rights to appeal the State Departments decision on revocation or non-issuance.