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Will the IRS Take Your Passport?

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Yes. Under certain circumstances, the IRS can certify your unpaid tax debt to the U.S. Department of State, which can lead to the denial, revocation, or limitation of your passport. This authority arises from the Fixing America’s Surface Transportation (FAST) Act of 2015, codified at 26 U.S.C. § 7345 (often cited as IRC § 7345). The relevant statutes and guidance set forth the rules by which the IRS may restrict international travel privileges for taxpayers with serious federal tax delinquencies.

1. Legal Authority: 26 U.S.C. § 7345 and 22 U.S.C. § 2714a

Inflation Adjustments

The initial threshold for “seriously delinquent tax debt” was set at $50,000 in 2015. However, 26 U.S.C. § 7345 explicitly directs readers to annual Revenue Procedures for inflation adjustments (see the note under 26 USCS § 1). As a result, this amount rises slightly most years. Taxpayers should consult current IRS guidance or a tax professional to confirm the exact threshold for the current tax year.

2. Defining “Seriously Delinquent Tax Debt”

Under 26 U.S.C. § 7345(a), a “seriously delinquent tax debt” meets all of the following criteria:

  1. Legally enforceable debt: The debt is a valid, assessed tax liability (including penalties and interest).
  2. Amount exceeds the statutory threshold: Originally $50,000, adjusted annually for inflation.
  3. Collection actions taken:
    • A Notice of Federal Tax Lien has been filed (and all administrative remedies under the law have lapsed or been exhausted), or
    • A levy has been issued.

This ensures that passport revocation or denial generally occurs only after the IRS has already initiated standard collection procedures.

3. How the Passport Certification Process Works

  1. IRS Certification
    When the IRS determines that your tax debt is “seriously delinquent,” it will certify your account and send this information to the U.S. Department of State. At the same time, the IRS sends you a Notice CP508C (often referred to as a Passport Denial Letter) by mail.
  2. Department of State Action
    Upon receiving certification from the IRS, the State Department will generally deny your passport application or renewal. If you currently have a valid passport, the State Department may revoke it or limit it to return travel to the United States only.
  3. Taxpayer Notification and Timeline
    • You will receive Notice CP508C, explaining why you have been certified and detailing how to resolve the debt.
    • The State Department typically provides a 90-day window to allow you to address your tax situation before denying or revoking a passport.

For additional details on this process, see:

4. Exceptions and Exclusions from Certification

Certain taxpayers are excluded from passport certification, even if their tax debt exceeds the threshold. Per 26 U.S.C. § 7345(b)(2) and IRS guidance:

  1. Bankruptcy: Taxpayers in an active bankruptcy proceeding.
  2. Identity Theft Victims: Taxpayers identified by the IRS as victims of tax-related identity theft.
  3. Hardship / Currently Not Collectible Status: Accounts in “currently not collectible” status due to financial hardship.
  4. Federally Declared Disaster Areas: Taxpayers in areas affected by natural disasters designated by the federal government.
  5. Pending Installment Agreement or Offer in Compromise: Taxpayers who have submitted a request and the IRS has not yet refused, or those with an agreement pending approval.
  6. Military Service: Taxpayers serving in a combat zone (or participating in a contingency operation).

For reference:

5. Resolving Your Tax Debt to Prevent or Reverse Certification

To avoid passport issues—or to remove an existing certification—you generally need to resolve your tax debt.

Common pathways include:

  1. Pay the Debt in Full
    The most direct method is simply paying off the entire tax liability (including penalties and interest).
  2. Enter into an Installment Agreement
    By setting up a payment plan with the IRS, you are no longer considered “seriously delinquent.” Once the installment agreement is approved and active, the IRS will reverse the certification.
  3. Offer in Compromise (OIC)
    If you qualify for an Offer in Compromise and the IRS accepts it, your tax debt is resolved at a negotiated amount. This acceptance removes the serious delinquency designation.
  4. Request Innocent Spouse Relief
    Under certain circumstances—particularly when joint tax liabilities stem from a spouse’s actions—innocent spouse relief could reduce or eliminate your liability.
  5. Other Successful Challenge
    If you pay or otherwise discharge your debt through other legal means (e.g., establishing that the debt is unenforceable), the IRS must reverse your certification.

Timing of Certification Reversal

Once you resolve or adequately address the tax debt, 26 U.S.C. § 7345(c) requires the IRS to notify the State Department that the certification is reversed. The IRS typically aims to reverse certification within 30 days, but it can expedite the process if you have urgent travel needs or if you are living abroad. For details on expedited handling, see:

6. What If You’re Already Traveling or Living Abroad?

If you are overseas when your passport is revoked or it expires, the State Department can issue you a limited-validity passport—valid only for direct return to the United States. This ensures you can travel back home to resolve the tax matter. However, your travel may be restricted until you address the debt or negotiate an agreement with the IRS.

7. Challenging an Erroneous Certification

If you believe you were wrongly certified (for example, if you already paid the debt, or the debt is below the threshold), take these steps:

  1. Contact the IRS
    Call the number on your Notice CP508C:
    • Domestic: 855-519-4965
    • International: 267-941-1004
  2. Provide Documentation
    Submit proof of payment or other evidence showing the certification is erroneous.
  3. Legal Action
    If administrative remedies fail, 26 U.S.C. § 7345(e) permits you to file suit in the U.S. Tax Court or a U.S. District Court. A judge can order the IRS to reverse the certification if it is found to be invalid.

Conclusion

The IRS’s authority to affect your passport for unpaid taxes is a powerful enforcement tool aimed at encouraging compliance. Key points include:

  • Threshold: Debts exceeding $50,000 (indexed annually for inflation).
  • Certification: Triggered by a filed tax lien (with lapsed remedies) or a levy, leading the IRS to notify the U.S. Department of State.
  • Passport Actions: The State Department can deny, revoke, or limit a passport based on IRS certification.
  • Exceptions: Individuals who are in bankruptcy, victims of identity theft, in a disaster area, on an approved payment plan, or serving in a combat zone, among others.
  • Reversal: Paying the debt or arranging a formal payment agreement (installment agreement, Offer in Compromise) generally leads to reversal of certification.
  • Urgent Travel: Expedited reversal is available if you can prove immediate or near-term travel needs.

By understanding your rights and the IRS’s processes, you can act quickly to prevent or resolve the serious consequences of a passport restriction. For more detailed guidance or personalized advice, consult a qualified tax professional or attorney.

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