Unpaid Tax Debt? You Soon Won’t be Able to Leave the U.S.
It’s time to pay up, tax dodgers.
Starting in early 2017, the Internal Revenue Service will begin certifying tax debt to the U.S. State Department, which oversees passport applications and renewals. That means if you haven’t paid your federal taxes, don’t expect to travel outside the U.S.
The new rule, which adds section 7345 to the Internal Revenue Code, was signed into law by President Obama in 2015 as part of a five-year infrastructure spending bill. It reads:
Sec. 32101) Amends the Internal Revenue Code to require the Department of the Treasury, upon receiving certification by the Internal Revenue Service (IRS) that any individual has a seriously delinquent tax debt in excess of $50,000, to transmit the certification and disclose certain tax return information to the Department of State for action with respect to denial, revocation, or limitation of a passport for the individual. Prohibits State, upon receiving such certification, from issuing a passport to such an individual except in emergency circumstances or for humanitarian reasons. Requires State to revoke a passport previously issued to the individual; but to allows permitting a limited passport for return travel to the United States.
Authorizes State to deny a passport application or revoke a passport if the application does not include the applicant's Social Security number, or includes an incorrect or invalid number willfully, intentionally, negligently, or recklessly provided by the applicant.
The IRS website vaguely states that it will begin notifying the State Department of unpaid taxes very soon.
“The IRS has not yet started certifying tax debt to the State Department. Certifications to the State Department will begin in early 2017, and this webpage will be updated to indicate when this process has been implemented,” the IRS website states.
If you’re seriously delinquent on $50,000 or more in federal taxes, plan to pay up or you won’t be able to fly internationally. Or you can just flee the country while you still have the chance. We hear Mexico is lovely this time of year.