Ignoring a big tax bill can have serious consequences that extend beyond financial penalties. In fact, the federal government now has the authority to revoke or limit your passport if you have a “seriously delinquent tax debt,” which is defined as owing more than $62,000 in federal taxes, penalties, and interest that you have repeatedly ignored. This new enforcement mechanism has been in place since 2018 and serves as a last-ditch effort by the government to collect unpaid tax levies.
For travelers, having your passport revoked or limited due to tax debt can lead to significant disruptions in your travel plans. You may not be able to take trips overseas until you’ve resolved your debt, and even expats or individuals who travel abroad for business may have to return to U.S. soil indefinitely until their tax case is resolved. In essence, not paying your taxes could prevent you from enjoying international travel opportunities, especially now that demand for travel has surged post-pandemic.
In recent years, tax enforcement efforts involving passports have ramped up, with more cases being reported. Certified public accountants and tax professionals have seen an increase in the government’s use of passport revocation as a means to compel individuals to address their tax debts. The collection effort has proven to be effective in getting debtors to respond to the IRS and make efforts to pay what they owe.
While revoking a passport is a serious consequence, it is not the government’s first step in collecting overdue tax debts. The IRS must have exhausted all other typical collection activities before resorting to passport revocation. This process includes notifying the taxpayer of their seriously delinquent tax debt, mailing a notice outlining the potential implications, and providing the individual with an opportunity to address and resolve the debt before their passport is revoked.
In some cases, individuals may be caught off guard by a passport denial, especially if they were unaware of their tax debt or if the IRS had outdated contact information. It is essential for taxpayers to stay informed about their tax obligations and address any outstanding debts promptly to avoid disruptions to their travel plans. The IRS sends taxpayers a notification before revoking their passport, giving them an opportunity to resolve their account and prevent passport cancellation.
Ignoring a big tax bill can have far-reaching consequences, including the revocation or limitation of your passport. It is crucial for individuals to take their tax obligations seriously and address any outstanding debts promptly to avoid disruptions to their travel plans and potential legal repercussions. By staying informed and proactively resolving tax issues, individuals can prevent surprise passport denials and ensure that they can continue to travel freely.
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