Do you know that having delinquent debt may lead to failure of getting a U.S. passport and cancelation of your current passport? Yes, you have read it right! If an individual has a significant amount of tax debt and is considered “seriously delinquent”, based on Internal Revenue Code (IRC) Section 7345, the IRS may report it to the U.S. Department of State and issue Notice CP508C.
Generally, the U.S. Department of State won’t renew the passport of the affected taxpayer after receiving the report from the IRS and such person may not get a new passport or worse, their current passport can be revoked.
To have a better understanding of the consequences of unpaid taxes that may affect your passport renewal and application, read on and learn about the factors leading to your passport revocation.
Can You Lose Your Passport if You Don’t Pay Taxes?
According to the Fixing America’s Surface Transportation (FAST) Act in 2015, The Internal Revenue Service (IRS) is allowed to request the U.S. State Department to deny passport renewals and new applications, or revoke the current passport of taxpayers who have been certified as having seriously delinquent tax debt. The IRS revoking passports has been going on for several years now.
What is seriously delinquent tax debt? This tax debt is a person’s unpaid, legally enforceable federal tax debt (including penalties and interest) with a total of more than $54,000 which will be adjusted annually for inflation. The IRS will certify that a person has seriously delinquent tax debt when:
- A notice of federal tax lien has been filed and all the administrative remedies under IRC Code Section 6320 have been exhausted.
- A Levy has been issued.
According to the state law, the State Department won’t issue a new passport and allow renewal, or in some cases, may revoke the passport after receiving certification from the IRS. Furthermore, in some instances, when the taxpayer is abroad, the State Department may issue a limited passport good for direct return to the U.S.
However, the State Department will hold the taxpayer’s application for a new passport or renewal for 90 days who receives certification from the IRS, so that they can:
- Resolve any mistakes on the certification issued;
- Make full payment of the tax debt; or
- Make a payment arrangement with the IRS to settle the owed tax debt through installment.
Once the taxpayer resolves the seriously delinquent tax debt they owe, the IRS will reverse the issued certification within 30 days from the date of the resolution and notify the State Department as soon as applicable. Thus, if you don’t want to lose your passport due to unpaid taxes, you should resolve your tax issues and pay your owed taxes as soon as possible.
Tax Debt Cases that Won’t Be Submitted to the State Department
Indeed, having seriously delinquent tax debt may lead to passport revocation or denial in your passport renewal. However, some owed taxes aren’t considered as seriously delinquent tax debt; among these are the Report of Foreign Bank and Financial Account (FBAR) penalty and child support. Another example is tax debt:
- Being paid on time with a settlement agreement entered with the Department of Justice or with an Offer in Compromise accepted by the IRS.
- Being paid on time with an installment agreement approved by the IRS.
- For which collection has been suspended due to a request for innocent spouse relief.
- For which collection due process hearing is requested on time regarding a levy to collect the debt.
Also, there are a few exceptions that will make you disqualified for a certification. As such, there are several types of tax liability cases the IRS does not report or certify to the State Department. These include the following:
- If you have filed for bankruptcy (filing bankruptcy can clear tax debt).
- If you are living in a federally declared disaster area.
- If you are a victim of tax-related identity theft as identified by the IRS.
- If you have a pending installment agreement request with the IRS.
- If you have an account that the IRS has been identified as not collectible due to hardship.
- If you are serving in a designated combat zone or took part in a contingency operation.
How Does the IRS Take Away Passports?
When it has been certified to the State Department that you have seriously delinquent tax debt, the IRS will send you Notice CP508C. This note will be sent to your last known address and your attorney won’t receive a copy of this notice. However, the IRS won’t directly revoke and take away passports. Rather, it will notify the State Department and request to exercise authority to revoke a passport.
Furthermore, if a taxpayer cannot reverse the certification issued by the IRS, they can file a suit in the U.S. District Court or Tax Court to determine whether such certification is erroneous or if IRS failed to reverse the certification when it was subject to reversal. As such, if the court determines that the issued certification should be reversed, it will order the IRS to inform the State Department that the certification was made with errors.
How to Check if Passport is Revoked
If you want to know the status of your passport — whether your application has been denied, canceled, or revoked due to your tax debt — you may contact the State Department. How? You may call them through National Passport Information Center at 877-487-2778.
If you have a flight for international travel in a few days and you have to resolve passport issues before your travel date, you should call the contact number written on Notice CP508C. However, if you already have a U. S. passport, you can still use it until the State Department will call and inform you that they’re taking action to limit or revoke your passport.
What To Do if Your Passport has Been Denied or Revoked?
If you receive a notice CP508C from the IRS, that means you have unpaid taxes that are considered seriously delinquent based on Internal Revenue Code (IRC) Section 7345. Thus, if you don’t want to be a recipient of this terrifying note, you must pay your taxes responsibly. But, if you already received a certification from the IRS, all you have to do is pay the taxes you owe to avoid passport revocation and unsuccessful renewal of passport.
Furthermore, if you can’t pay the amount you owe in onetime payment, you can settle it through alternative payment arrangements such as an Offer to Compromise or an installment payment plan. With this, IRS may reverse the certification of having seriously delinquent tax debt and may save yourself from possible passport revocation.
However, if you encounter some instances when the tax amount or the certification issued was made in error, you may contact the number written on the Notice CP508C to clarify any lapses. Moreover, if you already paid your tax debt before receiving the notice, you may send proof of payment to the address on the Notice CP508C to get a reversal certification.
What to do if IRS Revokes your Passport while You are Abroad?
If you have a severe tax debt of more than $54,000, the IRS can start the process leading to revocation or denial of your passport even if you live abroad. One of the essential facts about the United States is that it’s among the countries across the world that require you to report your income regardless of where it was earned or even if you work overseas.
Fortunately, you can qualify for a foreign credit if you pay income tax to the state where you live, so you don’t have to struggle with double taxation. Moreover, the IRS also requires taxpayers to report income beyond $10,000 in foreign accounts. If you fail to do so, you may face serious penalties that could increase your tax debt significantly, leading to passport revocation.
In this case, you will be given a chance to have a direct return and travel back home on a limited passport, but using your passport to go to other countries would be compromised. Hence, US citizens who are abroad and are not tax compliant will face passport and travel issues in the future.
How Do I Know If My Certification Has Been Reversed?
If your certification has been reversed by the IRS, you will receive a CP508R Notice. Once IRS has sent you this note, that means State Department has been notified about the reversal, and thus, you don’t have to respond.
However, it is essential to keep this notice along with your essential files, so that you can automatically send proof that your certification has been reversed whenever you need to. On top of that, after you resolve your tax liability issue, you should make your tax payments on time and meet all the requirements of any payment agreements that you have signed on.
Can the IRS revoke my passport?
Technically, the IRS can’t revoke your passport. But, the IRS can begin the process of taking your passport once you are reported as having seriously delinquent debt. When IRS notify the State Department that you owe a significant amount of tax debt (of more than $54,000), a certification will be issued to you which gives State Department a legal ground to cancel your passport application and renewal, or even revoke your passport.
Thus, if you don’t want to go through this terrifying scenario, you must pay your taxes on time. Also, once you receive a CP508C Notice from the IRS you should start resolving your tax issues before such a problem becomes bigger, which leads to passport revocation.
Can You Leave the Country if You Owe the IRS?
Yes! You can still leave the country even if you owe the IRS, provided that you have an IRS acceptable alternative payment arrangement such as an Offer to Compromise or installment payment plan.
As such, you would still be able to travel if you are making your payments according to the agreement you have signed. Also, you can be able to travel if the State Department will issue a passport in an emergency or for humanitarian reasons.
How do you Know if Your Passport Has Been Revoked?
If you want to know the status of your passport — whether your application has been denied, canceled, or revoked due to your tax debt — you may contact the State Department through National Passport Information Center at 877-487-2778. Or, you may visit and send queries to the IRS website regarding your tax debt status and verify whether your certification has been reversed or not yet.
What Happens If Your Passport is Revoked?
If the State Department decides to revoke your passport, you may have a limited issued passport only for a return trip to the U.S. or a limited passport that only allows return trip to the United States. Thus, you may be restricted to travel to other countries once your passport has been revoked due to unpaid tax debt.
How Much Do You Have to Owe the IRS to be Denied a Passport?
If you owe the IRS more than $54,000 in overdue taxes which will be adjusted annually for inflation, you may not be able to renew your existing passport or get a new one — or it might simply be revoked, whether you’re home or stay overseas.
Can IRS Restrict Travel?
Once the IRS certifies the State Department that you have seriously delinquent tax debt, your current passport can be canceled or you may not be able to renew your passport. As such, if your debt is severe enough, the IRS can go as far as preventing you from traveling out of the country by blocking your ability to obtain a passport.
Can You Get a Passport if You Owe the IRS?
When you have settled your seriously delinquent tax debt, IRS may reverse the certification issued under your name. Even though you cannot pay your outstanding tax liabilities in full, you may settle it through an Offer to Compromise or installment payment plan so you can get a new passport or renew the existing one.
If you love to travel around the world, you should always pay your taxes on time to avoid having seriously delinquent tax debt to IRS which can be a ground for passport revocation.
However, if you have already received a CP508C Notice, you should check the amount of tax you owed and pay it in full or through installment to get a reversal certification. Thus, if you don’t want to face passport issues due to unpaid taxes in the future, you should always pay your tax liability and never leave your balance as it is.