The IRS may revoke your passport as a 'last resort' to collect overdue taxes.

• If an individual's federal tax debt is "seriously delinquent," the IRS is legally required to inform the State Department.
• The taxpayer has repeatedly ignored a federal tax debt of more than $62,000 in 2024.
• If taxpayers fail to pay their outstanding bill, the government may deny their passport application and can revoke or restrict their active passport.

Ignoring a big tax bill could result in the revocation of your passport by the federal government, travelers should be cautious.

Such punishments have become more frequent in recent years, experts said.

The IRS and Treasury Department must inform the State Department about an American's "seriously delinquent tax debt" as per federal law.

The federal debt, exceeding $62,000 in 2024, has been repeatedly disregarded by the taxpayer.

An individual's debt threshold is determined by the total federal tax liabilities, including penalties and interest, and is adjusted annually for inflation.

According to the IRS, the State Department typically does not issue a new passport and may even revoke or restrict an existing one if there is significant debt.

Since 2018, the government has employed this enforcement mechanism as a final resort to recover unpaid tax debts, according to experts.

If debts remain unpaid, the consequences could be severe, such as travelers being unable to go on trips overseas until their debts are settled. Experts suggest that expats and those who travel abroad for business may have to stay in the U.S. until their tax case is resolved.

Troy Lewis, a certified public accountant based in Draper, Utah, and an accounting and tax professor at Brigham Young University, stated that revoking a passport is "a step of last resort."

To capture the attention of wealthy individuals regarding their tax payments, you should ensure that they cannot spend their summers in Europe, according to him.

'It gets people to call the IRS'

The number of Americans requesting U.S. passports has reached a record high of 21.6 million in fiscal 2023, as the Covid-19 pandemic subsides and the demand to travel abroad increases.

Over the past three years, tax enforcement efforts involving passports have increased in Denver, where Todd Whalen, a CPA, is based.

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At the airport, a client discovered that his passport had been revoked while attempting to fly to Mexico for his son's high school graduation celebration.

""The collection effort works as it encourages individuals to contact the IRS," Whalen stated."

The State Department refused to disclose annual figures on how many passports were revoked or denied, while the IRS remained silent by press time.

All other collections must have been 'exhausted'

Overdue tax debts can easily exceed the $62,000 threshold, as stated by Virginia La Torre Jeker, an attorney specializing in U.S. international tax law.

Not filing various foreign information returns may result in "significant penalties" for Americans living abroad, as stated in an email.

In addition to personal loans, debts can also encompass any tax liabilities owed by individuals, such as business taxes for which the taxpayer is personally responsible or trust fund recovery penalties, which pertain to withheld income and employment taxes like Social Security taxes or railroad retirement taxes.

Experts said that the government usually doesn't revoke a passport as its initial method to recover unpaid debts.

The taxpayer has not answered prior IRS notices of a federal tax lien, which is a legal claim on a debtor's assets.

The constitutionality of the federal government revoking passports to collect tax debts has been upheld by various courts, according to Lewis.

He cited Franklin v. United States in the U.S. Court of Appeals for the 5th Circuit and Maehr v. United States Department of State in the U.S. Court of Appeals for the 10th Circuit as examples of recent cases.

James Franklin, the defendant, failed to file accurate tax returns and report a foreign trust of which he was the beneficial owner, resulting in a tax debt of approximately $422,000. The IRS filed a tax lien and seized his Social Security benefits. Subsequently, the State Department revoked his passport.

"It appears widely accepted that this is something the government can accomplish," Lewis stated.

Travelers have remedies available

The State Department does not immediately revoke a passport upon receiving notice of seriously delinquent debt from the IRS. Instead, the IRS alerts the State Department of the delinquency, and the taxpayer receives a CP508C notice detailing the potential consequences.

According to La Torre Jeker, the IRS considers various factors, such as past noncompliance and failure to cooperate with the IRS, when deciding to revoke a passport.

By restricting the passport's use to U.S. return travel, the State Department can prevent the person from being trapped in limbo if outside the country, she said.

The IRS sends taxpayers a Letter 6152 before revocation, requesting them to contact the IRS within 30 days to resolve their account and prevent passport cancellation.

At Advanced Tax Solutions, Whalen stated that sometimes debtors are caught off guard when their passport is denied due to outstanding debts.

"Often, they are unaware of their balance until they arrive at the airport," he stated.