The federal government has implemented stringent measures to ensure that Americans who owe a significant amount of tax debt to the IRS are held accountable for their financial obligations. One of the most severe consequences of ignoring a large tax bill is the revocation or limitation of a passport. Federal law mandates that the IRS and Treasury Department must inform the State Department if an individual has a “seriously delinquent tax debt,” which is defined as a federal debt exceeding $62,000 in 2024 that has been repeatedly neglected.
The State Department is authorized to withhold the issuance of a new passport and may take action to revoke or restrict an existing one in cases of serious delinquency. This enforcement mechanism has been in place since 2018 and is considered a last resort effort by the government to collect unpaid tax levies. The potential consequences for travelers who fail to address their tax debt can be significant; they may be prohibited from traveling overseas until the debt is resolved. Expatriates and individuals who frequently travel abroad for business purposes may be required to return to the United States until their tax case is concluded.
In recent years, there has been a notable increase in tax enforcement efforts involving passports. Passport-related tax collection cases have become more prevalent, prompting individuals to address their tax obligations to avoid travel restrictions. Various tax professionals and experts have observed a growing trend in the use of passport revocation as a tool to compel taxpayers to settle their outstanding tax liabilities.
While revoking a passport due to tax debt may seem extreme, the federal government has legal authority to do so as confirmed by court rulings. The IRS must exhaust all other collection activities before resorting to the revocation of a passport, such as placing a federal tax lien and sending notices to the taxpayer. The certification of a seriously delinquent tax debt by the IRS triggers the State Department to issue a notice (CP508C) to the taxpayer outlining the potential consequences of non-compliance.
Taxpayers facing the risk of passport revocation are advised to take proactive steps to address their tax debt. Resolving the outstanding balance through payment in full, entering into a payment plan, or reaching a compromise agreement with the IRS can prevent passport cancellation. The State Department may limit the use of an individual’s passport solely for return travel to the U.S., ensuring that they are not stranded abroad due to the inability to travel.
Despite efforts to notify taxpayers of their overdue tax debts and the potential consequences, some individuals are caught off guard when their passport is denied while traveling. Factors such as outdated contact information or incorrect mailing addresses can lead to missed notifications from the IRS, causing individuals to discover their tax debt only when attempting to travel internationally.
The revocation or limitation of passports for Americans with seriously delinquent tax debts serves as a powerful incentive for individuals to fulfill their tax obligations promptly. By understanding the consequences and taking proactive measures to address tax debt, taxpayers can avoid the disruption and inconvenience of having their passport revoked while also ensuring compliance with federal tax laws.