In case you were fuming about President Donald Trump’s executive order with regard to restricting immigration and halting the refugee admission program, wait until you take a load of this: your good friend the IRS is preparing to revoke US citizens passports for unpaid taxes.
Yes, you got that right Eddie and Joe, you may be rioting and protesting about travel bans for Middle East countries, but you may very well lose your travel privileges under the tax code Section 7345 and you don’t even care or know about it.
I bet you had no idea that more than a year ago, during Barack Obama’s administration, the good liberal who loves open borders and all the people in the third world but not Americans, the US Congress gave IRS a cool new weapon for collecting taxes. And Barack Obama signed the respective weapon into law.
Dubbed “Revocation or Denial of Passport in Case of Certain Tax Delinquencies”, the tax code section 7345 is by no means limited to those special cases when the IRS thinks you, the debtor are are trying to leave the country, nor to criminal tax cases.
The whole purpose of the law is to use travel “privileges” as the ultimate mean to enforce tax collections. The “Revocation or Denial of Passport in Case of Certain Tax Delinquencies” was first proposed in 2012 but it was rejected at the time. However, in 2015 it was passed by the Congress and Barack Obama signed it into law.
A year and then some later, the IRS posted some pretty interesting details about the respective law on their website. Long story short, if you owe enough in tax-debt to the IRS, the IRS may notify the State Department and generally speaking, the State Department will not renew nor issue a passport after receiving notifications from the IRS that the respective individual owes money to the Federal Government.
The IRS certification process will begin early this year and the process will be fully implemented ASAP. Here’s from the IRS website for your viewing pleasure:
Seriously delinquent tax debt is an individual’s unpaid, legally enforceable federal tax debt totaling more than $50,000 (including interest and penalties, but subject to an inflation adjustment) for which:
- A notice of federal tax lien has been filed and all administrative remedies under IRC § 6320 have lapsed or been exhausted or
- A levy has been issued
Some tax debt is not included in determining seriously delinquent tax debt even if it meets the above criteria. It includes tax debt:
- Being paid in a timely manner under an installment agreement entered into with the IRS
- Being paid in a timely manner under an offer in compromise accepted by the IRS or a settlement agreement entered into with the Justice Department
- For which a collection due process hearing is timely requested in connection with a levy to collect the debt
- For which collection has been suspended because a request for innocent spouse relief under IRC Section 6015 has been made
Before denying a passport, the State Department will hold your application for 90 days to allow you to:
- Resolve any erroneous certification issues
- Make full payment of the tax debt
- Enter into a satisfactory payment alternative with the IRS
There is no grace period for resolving the debt before the State Department revokes a passport.