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Travelers, beware: The federal government could revoke your passport if you ignore a large tax bill.
Such sanctions have become more common in recent years, experts said.
Federal law requires the IRS and the Treasury Department to notify the Department of State if any U.S. citizen has “seriously delinquent tax debts.”
This is a huge federal debt — more than $62,000 in 2024 — that taxpayers have repeatedly ignored.
The debt threshold includes the total federal tax liability, plus penalties and interest, imposed on an individual. It is adjusted annually for inflation.
The Department of State generally does not issue new passports and may revoke or limit an existing passport in cases of serious delinquency, according to the Internal Revenue Service.
Experts said the government typically uses this enforcement mechanism — which has been in place since 2018 — as a last-ditch effort to collect unpaid tax fees.
If these debts remain unpaid, the potential consequences could be dire: Travelers may not be able to take trips abroad until their debts are settled. Experts say expatriates and those traveling abroad for business purposes may have to return to the U.S. indefinitely until their tax case is resolved, for example.
“The passport revocation is a last resort,” said Troy Lewis, a certified public accountant based in Draper, Utah, and a professor of accounting and taxation at Brigham Young University.
“How do you get the attention of the wealthy when it comes to paying taxes? Just make sure they can’t spend the summer in Europe,” he said.
“It makes people call the IRS.”
Demand for foreign travel has surged as the COVID-19 pandemic has subsided. Americans applied for about 21.6 million U.S. passports in fiscal year 2023 — a record, according to the State Department.
Todd Whelan, a certified public accountant in Denver, has seen an increase in passport tax efforts over the past three years.
“This issue has become increasingly important,” said Whelan, founder of Advanced Tax Solutions, which helps consumers and businesses settle their tax debts. “We’ve had several cases this year.”
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In one case, a client discovered his passport had been revoked while at the airport while trying to travel to Mexico for a trip to celebrate his son's high school graduation.
“It works,” Whelan said of the tax collection efforts. “It gets people to call the IRS.”
A State Department spokesman declined to provide annual statistics on the number of taxpayers whose passports have been revoked or denied. The IRS had no comment at the time of publication.
All other groups must be “exhausted”.
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“It’s very easy” for back tax debts to exceed the $62,000 threshold, says Virginia La Torre Gecker, an attorney who specializes in U.S. international tax law.
Americans living abroad, for example, could face “significant penalties” for failing to file various foreign information returns, she said in an email.
She added that the debts may also include any taxes owed by individuals. These taxes may be business taxes for which the taxpayer is personally liable or penalties for the recovery of trust funds. (The latter relate to withheld income taxes and employment taxes such as Social Security taxes or railroad pension taxes.)
How do you get the attention of the wealthy when it comes to paying taxes? Just make sure they can't spend the summer in Europe.
Troy Lewis
Professor of Accounting and Taxation at Brigham Young University
However, passport cancellation is generally not the first method the government uses to collect such overdue debts, experts said.
The IRS should have already “exhausted” all other typical collection activities, said Lewis, owner of Lewis & Associates, a chartered accountancy firm.
Generally, this means that the taxpayer has not responded to previous IRS notices regarding a federal tax lien, for example. (A lien is the government's legal claim on a debtor's assets such as real estate and other personal property. However, it is not a step to collect on that property.)
Lewis said various courts have upheld the federal government's ability to cancel passports in order to collect tax debts as constitutional.
He pointed to two recent cases as examples: Franklin v. United States in the U.S. Court of Appeals for the Fifth Circuit, and Meyer v. U.S. Department of State in the U.S. Court of Appeals for the Tenth Circuit.
In the first case, defendant James Franklin owed about $422,000 in taxes for failing to file accurate tax returns and report a foreign trust of which he was the beneficial owner. The IRS eventually filed a tax garnishment and levied Social Security benefits on him, and the State Department later revoked his passport.
“It seems pretty much established that this is something (the government) should do,” Lewis said.
Travelers have treatments available.
The State Department does not immediately revoke a passport. When the IRS determines that a debt is seriously delinquent and alerts the State Department, it sends the taxpayer a notice—CP508C—outlining the potential consequences of this classification.
If someone applies for a passport, the State Department will usually deny and close the application if the person does not make any efforts to pay off their debts. These efforts may include paying off the balance in full, entering into a payment plan, or reaching a settlement agreement with the IRS.
The Internal Revenue Service said the debtor will still be able to use an active passport, if he has one, unless he is notified in writing by the Department of State that his passport has been cancelled or restricted.
“The IRS looks at various factors, including past non-compliance by the taxpayer and the taxpayer’s failure to cooperate with the IRS,” La Torre-Gecker says, when choosing whether to revoke a passport.
She said the State Department could only use the passport to return to the United States, thus preventing a person from “falling into limbo” if they were outside the country.
She added that the IRS sends taxpayers letter No. 6152 prior to cancellation, asking them to contact the IRS within 30 days in order to resolve their account and avoid passport cancellation.
However, sometimes the passport refusal catches debtors off guard when they travel, said Whelan of Advanced Tax Solutions.
For example, the IRS may have the wrong address on file — especially if the taxpayer has moved — and send notices to the wrong place, Whelan said.
“Often, they don't realize they have an outstanding balance until they get to the airport,” he said.
