Passport and Taxes

The Internal Revenue Code has a new addition that provides additional repercussions for not paying your taxes. There is a new section called “Revocation or Denial of Passport in Case of Certain Tax Delinquencies”. While it is still uncertain on how aggressively they will enforce this, the new section of the code allows the IRS to rescind existing passports, not issue new passports, or deny renewal if certain tax delinquencies exist.

Who Does This Apply To?

For those who already have an existing installment agreement or other payment plan with the IRS, this does not apply. However, for those with a $50,000 or more debt to the IRS that has not been resolved, this could affect your travel plans in the future. The $50,000 threshold includes not only taxes, but penalties and interest as well. With late tax payment penalties plus interest being able to exceed over 25% of the tax owed, $50,000 in debt to the IRS is not as large a figure as taxpayers may think.

This Code Affects Domestics Travelers Too

This section of the Internal Revenue Code comes after a new law that may require passports for domestic travel as well in 2016. It is related to the Real ID Act that wants to create a national standard for state-issues IDs. The TSA could require passports instead of driver’s licenses to get on a flight in 2016. While this will not apply to all states, travelers from Minnesota were recommended to get passports by January 2016 to fly. North Carolina IDs meet the national standard, but it may be “better safe than sorry” to start carrying them.
The best thing to do to avoid these issues is resolve any outstanding tax debt issues with the IRS. At a minimum, we can help ensure you are set up on a payment arrangement to avoid revocation of your passport or any future issues obtaining one for travel. We also provide tax resolution services to help reduce or eliminate late payment penalties and interest.