Bad news if you owe the IRS tens of thousands in back taxes: your passport may be at risk. While taxpayers have previously thought of alleged passport restrictions as an idle threat, recent action from the IRS suggests that this approach will increasingly be used as a deterrent to tax debt.
Who Is at Risk of a Passport Revocation?
The State Department and IRS have amped up enforcement on the Fixing America’s Surface Transportation Act, which enables these agencies to either deny new passport applications or revoke existing passports based on outstanding debt. The enforcement effort began in early 2018 but is expected to escalate as the IRS actively refers ongoing cases to the State Department.
To qualify for revocation, taxpayers must owe over $51,000 in legally enforceable federal tax debt. This can include interest and penalties.
Since the program’s inception, over 400,000 taxpayers have been notified that their passports face potential revocation. As of July 2018, these notices resulted in over 1,400 taxpayers entering into installment agreements. Updated data is not yet available, but it’s likely that the increased pressure from the State Department will convince many additional taxpayers to pursue installment plans.
Avoiding Passport Revocation
Hundreds of thousands of indebted taxpayers have already received notices from the IRS, but additional notices will be sent as these cases are referred to the State Department. Those who receive such notices are encouraged to get in touch with the IRS to resolve their debt — potentially through installment agreements or offers in compromise.
If you believe your passport may be at risk, get in touch with the Highland Tax Group as soon as possible. This matter requires urgent attention — and our tax experts are happy to help. Call today to get started.