Owe the IRS more than $50,000? Beware, the IRS can now revoke your Passport.

3 January 2016
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President Obama recently signed into law the 5-year infrastructure spending Bill. It adds a new section 7345 to the Internal Revenue Code. It is part of H.R. 22 – Fixing America’s Surface Transportation Act, the “FAST Act.” What you need to know about the FAST Act is that the IRS now has the ability to revoke your U.S. passport for an unpaid tax bill. More specifically, the IRS can now ask the State Department to do it for them if the IRS certifies you as having a seriously delinquent tax debt in an amount in excess of $50,000 and the IRS has filed a notice of lien.

Not planning on traveling out of the country any time soon? The Act’s potential effects are wide ranging and in some states in 2016 and beyond it may even be necessary to have a valid passport to board a domestic flight. If you are contesting a tax assessment, then don’t worry; the Act applies to a tax assessment that is final. So, if you are in Tax Court still arguing over your liability, then you are safe for the moment.

How all this is going to work is not yet known. Whether this is constitutional is also the subject of a heated debate in some quarters. However, if this new law may apply to you, and you have not yet entered into an installment agreement (IA) with the IRS exempting you from its effects, you may want to discuss the issue with your CPA and your tax attorney.