- Unpaid tax debt over $62,000 can lead to the denial or revocation of your U.S. passport by the State Department.
- The IRS certifies seriously delinquent tax debts to the State Department, which may deny passport applications or renewals.
- Travelers with significant tax debt risk being stranded abroad, as their passports may be limited to return travel to the U.S.
- Setting up a payment plan or negotiating an offer in compromise with the IRS can help prevent passport-related issues.
Traveling internationally is a privilege many U.S. citizens cherish, whether for leisure, business, or visiting family abroad. However, many don’t realize that unpaid taxes can jeopardize this privilege, with severe consequences that could ground your travel plans indefinitely.
How Unpaid Taxes Can Affect Your Passport
Federal law mandates that the IRS notify the State Department if a taxpayer has a “seriously delinquent tax debt,” defined as owing more than $62,000 in federal taxes. This threshold is adjusted annually for inflation and includes penalties and interest on unpaid taxes. Once certified as delinquent, the State Department may deny issuing or renewing your passport and, in some cases, may even revoke it altogether.
This enforcement measure has been in place since 2018 and serves as a last-ditch effort to collect significant tax debts from individuals who have ignored other IRS collection attempts. The consequences can be severe — travelers might find themselves unable to embark on international trips or, if already abroad, forced to return to U.S. soil until the debt is resolved.
For those who frequently travel for work or have family abroad, such a situation can be devastating. Imagine planning a vacation, attending a critical business meeting overseas, or visiting a sick relative, only to find out at the airport that your passport is no longer valid. These serious consequences show why staying on top of your tax obligations is crucial.
The Certification Process and Its Consequences
Before the IRS certifies a taxpayer as seriously delinquent, it must exhaust all other typical collection activities, including sending multiple notices and possibly filing a federal tax lien. If these efforts go unanswered, the IRS will proceed with certification, which then triggers the State Department’s involvement.
Once notified by the IRS, the State Department can take various actions, including denying passport applications or revoking current passports. However, these measures aren’t always immediate. Typically, the IRS will send a notice (CP508C) to the taxpayer, outlining the potential consequences and providing an opportunity to resolve the debt before passport actions are taken.
It’s also important to note that the State Department generally will not revoke a passport immediately. If you’re already abroad when your debt is certified, your passport may only be limited to return travel to the United States, preventing you from being trapped in a foreign country. However, once you get back on U.S. soil, you will need to address the debt before being able to travel internationally again.
In some cases, exceptions may allow for passport issuance even with significant tax debt. For example, if a taxpayer can demonstrate that revoking or denying a passport would cause undue hardship, the IRS might consider alternative arrangements. However, these cases are rare and typically require strong evidence of exceptional circumstances.
What to Do If You’re at Risk
If you find yourself at risk of passport denial or revocation due to unpaid taxes, act quickly. Here are three specific steps you can take to resolve the situation and protect your passport privileges:
1. Set Up a Payment Plan with the IRS
Establishing a payment plan is one of the most effective ways to prevent the IRS from certifying your debt as seriously delinquent. The IRS offers several options, including installment agreements that allow you to pay your tax debt over time. Even if you can’t pay the total amount immediately, entering into a payment agreement can halt the certification process and keep your passport intact. To initiate this process, contact the IRS directly or consult a tax professional to help you navigate the options.
2. Consider an Offer in Compromise
If your financial situation makes paying the full tax debt impossible, you might qualify for an offer in compromise (OIC). This option lets you settle your tax debt for less than the total amount owed. The IRS considers several factors when evaluating an OIC, including income, expenses, and asset equity. Negotiating an OIC can remove your debt from the seriously delinquent category, preventing passport-related consequences. However, the process can be complex, so working with a tax professional with experience negotiating these settlements is advisable.
3. Stay Proactive and Informed
Staying on top of your tax situation is critical, especially if you move frequently or have multiple addresses. The IRS sends notices to the last known address on file, so if you’ve relocated and haven’t updated your information, you could miss warnings about your tax debt. Regularly check your IRS account online and keep your contact details current to avoid being caught off guard by a certification notice. If you receive a CP508C notice, don’t ignore it — contact the IRS immediately to discuss your options.
A valid passport is essential for international travel in today’s interconnected world. Don’t let unpaid taxes take that away from you. If you’re facing significant tax debt, taking proactive steps now can help preserve your passport privileges and prevent unexpected travel disruptions. If you’re unsure of your next steps, consulting with a tax professional can clarify and guide you through resolving your tax issues.