Pay Your Taxes or Lose Your U.S. Passport

If you owe money to the IRS, you could find the status of your next big international trip in jeopardy. According to a new provision signed into law in December of 2015, a judge is not required to revoke a person’s passport. Even if they owe more than $50,000 in back taxes at any given time. Hence, it is import to pay your taxes.

It is important to note that just because you owe more than $50,000, you will loose your passport. However, the likelihood is high. Now, thanks to this new law, it is easier than ever for this exact scenario to take place. In order to lose your passport, the IRS would need to file a lien. Or, a levy after the account has reached $50,000 or more in size. Anyone who is in danger of losing their passport, will receive a written notice from the IRS. That will be prior to the action taking effect.

This new provision shows that the government is incredibly serious about the millions of delinquent accounts across the country. According to USA Today, the IRS reports that there were more than 12 million such accounts. Accounts that owes a collective $131 billion dollars in 2014 alone. This number includes the taxes that people owe along with interest and any penalties that were continuing to accrue over time.

The new provision is part of the FAST Act highway transportation bill that was signed on December 4, 2015. In addition, to these new provisions about passports, it is now a mandate. The IRS turns over a certain number of unpaid tax accounts to private debt collectors for further processing.

It is also important to note that under the FAST Act, the State Department can deny, revoke or limit the use of a taxpayer’s existing passport if their account has fallen delinquent to the specified degree. They are going to stop issuing passports in general for people who owe this amount of money. They will still take into consideration the certain emergencies and humanitarian reasons that a passport may need one. If a US citizen is out of the country at the time of losing their passport, they can still return home.

Also, important to note these new passport provisions will NOT affect anyone who has an agreement with the IRS to pay their taxes. If they have made an offer in compromise or if the taxpayer has already set up some type of installment agreement in an effort to bring their account to good standing, they would be able to proceed much as they always have.