Past Due Taxes and Passports

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14th Dec 2015

On December 4, the President signed into law P.L. 114-94, the “Fixing America’s Surface Transportation (FAST) Act.” In addition to authorizing federal surface transportation programs through fiscal year 2020, the Act contains important tax-related provisions.

Under Pre-Act law, Chapter 75 of the Code, “Crimes, Other Offenses, and Forfeitures,” makes no provision for denying or revoking passports on the basis of unpaid taxes.

The FAST Act adds a new Code section to Chapter 75 of the Code.  Under Code Section 7345, having a “seriously delinquent tax debt” is, unless an exception applies, grounds for denial, revocation or limitation of a passport effective January 1, 2016.

Seriously delinquent tax debt is an assessed tax debt that exceeds $50,000 and for which a notice of lien has been filed.  A seriously delinquent tax debt does not include a debt for which: there is a formal agreement in place to repay the debt; or collection is suspended because of a collection due process hearing or because innocent spouse relief under is requested or pending.

The $50,000 amount will be adjusted by inflation for calendar years beginning after 2016.

The Act provides procedures for, and restrictions on, IRS’s disclosure of the return information for purposes of passport revocation, as well as procedures for how an individual who was certified by IRS as having a seriously delinquent tax debt gets that certification reversed (i.e., in the case of an error).

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