In recent years, the federal government has significantly increased its efforts to enforce tax payment by revoking passports of those who ignore large tax bills. This enforcement mechanism, established in 2018, requires the IRS and Treasury Department to notify the State Department when an American taxpayer has a “seriously delinquent tax debt.” This debt threshold includes not only federal tax liabilities but also penalties and interest, which can quickly add up, making it easy for overdue tax debts to exceed the $62,000 threshold.
Consequences for Travelers
Unpaid tax levies can have serious consequences for travelers. Those with a seriously delinquent tax debt may find themselves unable to obtain a new passport or face the revocation or limitation of an existing one. As a result, individuals may be prohibited from traveling abroad until they resolve their tax debt. This enforcement action is considered a last resort by the government to collect unpaid taxes, disrupting travel plans and potentially trapping individuals abroad until their tax case is resolved.
Rising Demand and Surveillance
The enforcement of tax payment through passport revocation comes at a time when demand for travel has surged following the decline of the Covid-19 pandemic. With millions of Americans applying for passports each year, the impact of passport revocation on travelers has become more prevalent. Tax enforcement efforts involving passports have increased over the past few years, with many individuals only discovering their revoked passport while attempting to travel.
Revolving a passport due to unpaid tax debts is not the government’s first line of action. The IRS must have exhausted all other typical collection activities before taking this step. Various courts have upheld the government’s right to revoke passports to collect tax debts, emphasizing the seriousness of complying with tax obligations. Individuals are given notice and an opportunity to resolve their tax debts before their passport is revoked or limited, preventing unexpected disruptions to travel plans.
Despite efforts to notify individuals of their seriously delinquent tax debts and potential passport revocation, some taxpayers still find themselves caught off guard when their passport is denied while attempting to travel. Factors such as outdated addresses on file with the IRS can lead to missed notifications and surprise denials at the airport. This lack of awareness of overdue tax debts can leave travelers stranded and facing difficulties when trying to return to the U.S. or conduct business overseas.
The government’s enforcement of tax payment through passport revocation serves as a powerful tool to compel individuals to address their seriously delinquent tax debts. With consequences ranging from travel restrictions to passport revocation, individuals are encouraged to stay informed about their tax obligations and take proactive steps to resolve any outstanding debts. By understanding the implications of unpaid taxes on their ability to travel, individuals can avoid unforeseen disruptions and legal challenges related to their passport status.