US Expat Tax: Don’t Lose Your Passport!

If you are an American have seriously delinquent tax debt, IRC 7345 authorises the Internal Revenue Service (IRS) to certify that to the State Department. The department generally will not issue or renew a passport to you after receiving certification from the IRS.  

Upon receiving certification, the State Department may revoke your passport. If the department decides to revoke it, prior to revocation, the department may limit your passport to return travel to the U.S.

Seriously delinquent tax debt is an individual’s unpaid, legally enforceable federal tax debt totaling more than $50,000 (including interest and penalties) for which a:

  • Notice of federal tax lien has been filed and all administrative remedies under IRC 6320 have lapsed or been exhausted or
  • Levy has been issued.

 

Some tax debt is not included in determining seriously delinquent tax debt even if it meets the above criteria. It includes tax debt:

  • Being paid in a timely manner under  an instalment agreement entered into with the IRS
  • Being paid in a timely manner under an offer in compromise accepted by the IRS or a settlement agreement entered into with the Justice Department
  • For which a collection due process hearing is timely requested in connection with a levy to collect the debt
  • For which collection has been suspended because a request for innocent spouse relief under IRC 6015 has been made.

 

Before denying a passport, the State Department will hold your application for 90 days to allow you to:

  • Resolve any erroneous certification issues
  • Make full payment of the tax debt
  • Enter into a satisfactory payment alternative with the IRS.

There is no grace period for resolving the debt before the State Department revokes a passport.