On December 4th, 2015, President Obama signed into law the Fixing America’s Surface Transportation Act (the “Fast Act”), in an effort to direct funding to improve America’s roads. As a consequence of the Fast Act, a new provision has been added to the Internal Revenue Code (“IRC”). Under this new law, the State Department has authority to deny new passports, deny passport renewals, revoke existing passports, as well as limit travel a US return trip, from delinquent taxpayers.

The State Department is permitted to deny or revoke US passports from US citizen, including expatriates, only when the IRS has certified that the individual has a “seriously delinquent tax debt.” A seriously delinquent tax debt is defined in section 7345 of the IRC, and in broad terms means unpaid federal taxes over $50,000 and where the IRS has filed a tax lien against the taxpayer.

Once the US citizen’s passport is in line for revocation and paperwork has been submitted, it is difficult to reverse the process even after the unpaid taxes has been satisfied in full. Some special provisions will be made for “emergency and humanitarian” purposes and also for individuals who need to return to the United States. It will serve as a one-way ticket to get back home to make arrangements with the IRS and the State.

The law provides some exceptions and relief provisions to reinstate a revoked or denied passport:

  • If the debt has been satisfied in full.
  • If you are applying the Innocent Spouse Relief-
  • If an installment agreement has been made with the IRS
  • If the debt is erroneous
  • If the debt is below the $50,000 threshold

Whether living in the United States or abroad as an expatriate, seek the advice of legal counsel on procedures and reliefs available to you if you have unpaid taxes due to the IRS.

If you need assistance, you may contact Barbosa Legal a tax attorney at Barbosa Legal, to discuss your specific situation, knowing your communications will remain protected under the attorney-client privilege.