Unpaid Taxes Might Curtail Your International Travel Plans

Now that the COVID-19 international travel restrictions are loosening up (or soon to loosen up) everyone is itching to hit the roads or runways. But, before you pack those bags to catch that next flight to international destinations, make sure your financial house is in order.

Our legal correspondent and tax law expert, Jeff Cohen, has recently brought some IRS and U.S. State Department policies to our attention. The following is his report on these re-instated U.S. tax policies.

Your Tax Debt and Your Passport Status

In 2018 the Internal Revenue Service, at the direction of Congress, began a new policy of instructing the U.S. State Department to revoke or refuse to renew passports of taxpayers who owed $54,000 or more in unpaid taxes.  

Last year, due to Coronavirus concerns, the program was put on hold.  Now it is back.  

What this means per the IRS website is that “if you have seriously delinquent tax debt, the law authorizes the IRS to certify that debt to the State Department for action. The State Department generally will not issue a passport to you after receiving certification from the IRS.

The State Department may deny your passport application or revoke your current passport. If you’re overseas, the State Department may issue you a limited validity passport good for direct return to the United States.”

How It Impacts International Travel

The IRS certifies seriously delinquent tax debt to the State Department. The U.S. State Department will then notify the individual in writing that they have denied your U.S. passport application or revoked your U.S. passport due to this law. Before denying a passport, the State Department will hold your application for 90 days to allow you to address the issue with the IRS.

Some tax debt isn’t included in seriously delinquent tax debt such as the Report of Foreign Bank and Financial Account (FBAR) penalty and child support. Other tax situations that will not impact your international travel plans are when the tax is being paid timely with an IRS-approved installment agreement.

What To Do If This Situation Applies to Your Unpaid Taxes

You can read more information on the IRS website to see if this tax policy applies to any outstanding tax debt that you might have. The link to the Internal Revenue Service website is HERE.  

If your tax liability falls within this policy and you plan to travel, you should call Jeffrey L. Cohen to discuss how to protect your passport and your right to travel.  There are several ways to satisfy the program and get your passport back in effect.