Alerts and Updates

U.S. Citizens with Federal Tax Debt May Be Unable to Travel Abroad

April 2, 2019

Citizens who have federal tax debts in excess of $52,000, including interest and penalties, may have their U.S. passports revoked. 

New challenges may be brewing for U.S. travelers with seriously delinquent federal tax debts. Pursuant to the Fixing America’s Surface Transportation (FAST) Act, taxpayers may not be able to renew current passports or obtain new passports if they are delinquent in their tax obligations. When the IRS advises the U.S. State Department of U.S. citizens with seriously delinquent tax debts, a notice is issued to the taxpayer outlining steps needed to resolve their tax debt via a payment plan or other methods of resolution. Citizens who have federal tax debts in excess of $52,000, including interest and penalties, may have their U.S. passports revoked. Additionally, U.S. citizens residing or traveling overseas may be required to return to the United States until their tax debts are resolved.

Once the tax debt is resolved, the IRS will reverse the taxpayer’s delinquent certification within 30 days, the State Department will remove the certification, and the passport will no longer be at risk.

Citizens who have such tax debt can only avoid passport revocation if they resolve their tax debt. Resolution can occur in a variety of ways, including:

  • Paying the tax debt in full;
  • Paying the tax debt timely under an approved installment agreement;
  • Paying the tax debt timely under an accepted offer in compromise;
  • Paying the tax debt timely in accordance with a settlement agreement with the U.S. Department of Justice;
  • Requesting and obtaining a collection due process appeal; or
  • Suspending collection through an innocent spouse election or by requesting innocent spouse relief.

Beware, however, not to attempt the resolution opportunities by yourself. It is critical to obtain professional guidance as tax resolution is a complex process.

TAG's Perspective

If you have outstanding tax debt in excess of $52,000 and are currently traveling outside of the United States or contemplating international travel, we urge you to act promptly. There are a variety of options available to settle outstanding tax debt, often at quite favorable terms.

For Further Information

If you would like more information about this topic or your own unique situation, please contact Michael A. Gillen or Steven M. Packer. For information about other tax and accounting topics, please visit our publications page.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.