Most Americans have a general understanding of what can happen when it comes to neglecting to pay or file taxes. There are late fees, fines, and possibly even wage garnishment to be concerned about. In more serious cases, there can even be prison time. However, now losing your passport is added to the possible list of taxes punishments!

Those citizens who are seriously delinquent in their tax debt may now be facing penalties related to their passports. If your debt is reported to the State Department, they have the option to either revoke your passport or even refuse to issue you one. Yikes! With that said, it’s important to know what amount of debt classifies you as “seriously delinquent,” as well as how long it would be before the IRS revoked your passport.

Tax Travel Ban

While the passport law was signed by Obama back in 2015, the IRS released the details on how and when it will be enforced just earlier this year. On the IRS website, it says that the IRS was allowed to certify any serious delinquent tax debt to the State Department beginning in early 2017. Once that certification passes on, the State Department has the option to reject your passport renewal, as well as even revoke it.

If you are wondering what is considered to be serious unpaid debt, your taxes owed would have to total over $50,000, including any penalty fines and interest. It is unlikely that the IRS will certify this debt unless all other efforts to collect this payment have failed. If you are paying down an older tax debt under some agreement with the IRS, or if you are still contesting a debt, that will not be reported to the State Department. Your passport should be totally fine! If you are concerned about your passport, the best way to ensure that you get to hold onto it is to get on an installment plan as soon as you can.

Processing Passports

Don’t worry, your passport will not automatically be revoked if you file your taxes late or owe tax debt you cannot pay immediately. Even if the IRS does certify your outstanding tax debt, the State Department will always reach out to you and notify you of any status changes on your passport. If you are just now applying for a passport, the State Department will hold your application for 90 days to provide adequate time to set up a payment plan or pay off your debt.

Keep in mind that there is no such grace period before the State Department takes away an existing passport, but you might be able to obtain a limited passport if you need to return to the United States. You also have the option to challenge the revocation of your passport in court!

Avoiding Penalties

The good news is, the IRS is pretty lenient about penalties as long as you can prove that your failure to file or pay your taxes on time was for a good reason. For example, if you did not file your taxes because you were in the hospital and were not in a state to file them, they will likely give you an extension with no penalties. However, if it was just laziness or plain neglect, then you will have a harder time avoiding basic fees and fines. We recommend that you always reach out to the IRS if you predict that you will have a hard time paying back your taxes. They will often offer some sort of installment agreement, or they will give you an extension to file your taxes—whichever one you need specifically.

Contact Tax Law Offices

No one wants to lose their passport, especially if you have any upcoming plans to leave on an international vacation. The best way to get help in a situation like this is to reach out to an experienced attorney for advice. At Tax Law Offices, we believe in providing you with professional IRS tax attorneys who will pay close attention to your situation and give the best legal advice we can. If you are seeking a tax resolution, we would be happy to speak with you about your situation. Contact us to arrange a consultation!