Executive Order 13769, President Trump’s notorious travel ban that caused mass confusion and chaos in airports throughout the country, is being revamped following multiple federal court challenges. That travel ban, however, is not the only government action that aims to restrict human mobility to or from the United States.
U.S. citizens are also potential targets of government travel restrictions. In our February 9, 2016 blog post entitled "New IRS Collection Powers Extend to Passport Revocation," we noted how Section 32101 of President Obama’s Fixing America's Surface Transportation (FAST) Act gave power to the IRS to revoke the passports of individuals with seriously delinquent tax debt. That section has since been formally codified in the Internal Revenue Code.
Revocation or denial of passport in case of certain tax delinquencies
Under 26 U.S. Code § 7345, if you have more than $50,000 in seriously delinquent tax debt, the IRS has the power to have the U.S. Secretary of State revoke your passport (or refuse to issue one). Note that the original debt may have been far less than the $50,000 threshold amount, because that figure includes interest and penalties. Note that the amount is indexed yearly for inflation (see IRC § 7345(f)).
Before your passport can be revoked or denied, the IRS must first filed a notice of tax lien under IRC § 6323 or initiate a levy pursuant to IRC § 6331.
Tax debt excluded from § 7345
Some kinds of tax debt may not lead to passport revocation or denial, such as:
- Tax debt that is being timely paid pursuant to an installment agreement (IRC § 6059)
- Tax debt that is being timely paid under an accepted Offer in Compromise or settlement agreement (IRC § 7122)
- Tax debt that has been suspended following a request for innocent spouse relief (IRC § 6015)
- The taxpayer is awaiting a timely requested due process hearing before a levy to collect a tax debt (IRC § 6330)
Removing certification and passport restrictions
You generally have 90 days from the date the IRS sends its certification of the tax debt to the State Department to make full payment of your tax debt or enter into an alternate payment arrangement that is acceptable to the IRS.
To resolve errors with the IRS certification during this time period:
- If you already paid the amount due, you can send proof of payment to the address indicated on Notice CP 508C.
- If you recently filed a tax return and are owed a refund, the IRS should apply that refund to your tax debt; if it is sufficient to fully pay the amount due, the IRS should remove its certification with the State Department.
- You may also file a lawsuit in a U.S. District Court or with the U.S. Tax Court. You do not have to contact the IRS or file an administrative claim before filing suit.
When you resolve your tax issue, the IRS should remove or reverse its certification with the State Department within 30 days.
Experienced tax attorneys and litigators
Whenever you disagree with an IRS assessment, we recommend having an experienced tax attorney resolve the matter for you, rather than you doing it yourself. The tax team at Moskowitz, LLP can help. Call our San Francisco office today.