The President signed into law a new provision to the Internal Revenue Code
that gives the U.S. government the right to revoke or deny the renewal
of U.S. passports of U.S. persons who owe more than $50,000 in U.S. federal
taxes. It was appended to a massive highway funding bill, H.R. 22, Fixing
America’s Surface Transportation Act, the “FAST Act.”
The new provision, Code section 7345, authorizes the Secretary of the Treasury
to certify to the Secretary of State that a taxpayer has a “seriously
delinquent tax debt". A "seriously delinquent tax debt"
is greater than $50,000 (including penalties and interest) for which the
IRS has either filed a lien or levy. Upon receiving the certificate, the
Secretary of State can deny, revoke, or limit the taxpayer's U.S. passport.
The debt must be settled, uncontested, delinquent, and not subject to ongoing
administrative appeal or review. Taxpayers who have entered into installment
agreements, submitted offers-in-compromise, have requested collection
due process hearings, or requested innocent spouse relief are exempt from
the application of this provision. Moreover, those who need to travel
for emergency or humanitarian purposes are also exempt.
For more information,
contact Castro & Co.