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Tax News –Passport Revocation for Seriously Delinquent Taxpayers

The federal government recently signed the Fixing America’s Surface Transportation Act (“FAST Act”) into law allowing the Secretary of State to deny, revoke or limit the United States passports of individuals with “seriously delinquent” tax debt. This legislation allows the IRS and Department of Treasury to notify the Secretary of State where any individual taxpayer has an unpaid, legally enforceable federal tax liability of more than $50,000 (including penalties and interest). This notification is permitted only if the government has taken enforcement action to collect the tax due, and the taxpayer’s administrative and judicial rights have either lapsed or been exhausted. Where the IRS has taken the required steps and the taxpayer is not attempting to pay the balance due, the IRS may certify the taxpayer’s debt with the Secretary of Treasury for referral to the Secretary of State.

Taxpayers who have entered into payment arrangements with the IRS are not at risk of a passport recommendation even if more than $50,000 is owed. The same is true for Taxpayers who are considered non-collectible or have taken steps to resolve their liability through administrative avenues, such as requesting a Collection Due Process Hearing or filing for Innocent Spouse Relief. Before the government may recommend denial, revocation or limitation of an individual’s passport the IRS must have made a levy or filed a lien against the taxpayer. Where an IRS lien is filed, all administrative rights of the taxpayer must have been exhausted or lapsed.

Any action taken against a taxpayer’s passport under these procedures is limited. If the taxpayer makes efforts to become compliant or seek relief after his passport has been denied, revoked or limited, that individual is no longer considered “seriously delinquent” and the government must reinstate the passport. Additionally, taxpayers seeking return to the United States from another country will be granted a limited passport for direct return.

If you have unpaid taxes, contact Hone Maxwell LLP for assistance today.

Disclaimer: Hone Maxwell LLP articles and blogs are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.

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