U.S. Passports May Now Be Revoked or Denied in Case of Certain Unpaid Taxes
On Dec. 4, 2015, President Obama signed the Fixing America’s Surface Transportation Act (H.R. 22). Current law allows the State Department to refuse to issue or renew a passport if the applicant owes child support in excess of $2,500 or owes certain types of federal debts. The law does not extend to the rejection or revocation of a passport on the basis of delinquent federal taxes. The new law requires the Secretary of State to deny a passport (or renewal) and revoke an existing passport to a person certified by the IRS that has a “seriously delinquent tax debt.” Limited sharing of information between the Treasury and State Departments, including who has serious delinquent federal tax debts, would be permitted to accomplish this.
A seriously delinquent tax debt would be defined as any outstanding debt being assessed in excess of $50,000 (to be adjusted for inflation), for which a notice of lien has been filed and administrative with respect to such filing have been exhausted or have lapsed or a levy is made. Despite reaching the threshold amount, such debt may not be seriously delinquent if (1) the debt is being paid in a timely manner pursuant to an installment agreement or offer-in-compromise, or (2) collection action is suspended because a collection due process hearing or innocent spouse relief has been requested or is pending. The Secretary of State may issue or renew a passport for humanitarian or emergency reasons despite the applicant having a seriously delinquent tax debt.
Similar requirements would be in place for an applicant that fails to provide a social security number or provides an incorrect or invalid number, but only if the incorrect or invalid number was provided willfully, intentionally, recklessly or negligently. Exceptions for humanitarian or emergency purposes is allowed.
There will be IRS procedures to reverse such determination, including the timing of such notice to the Secretary of the Treasury. It also requires the affected individual to be notified of the certification or reversal of having a seriously delinquent tax debt. Such individual would also be given the right of judicial review in a federal district court or the Tax Court to determine the validity of the certification.
Potentially affected individuals should contact a knowledgeable professional to consider how to proceed.