IRS Begins Denying Passports to Thousands of Americans with Overdue Tax Debt

By:
Ruth Singleton
Published Date:
Jul 6, 2018

IRS

The IRS has started to enforce a 2015 law requiring it to coordinate with the State Department to deny or revoke passports for taxpayers with more than $51,000 of overdue tax debt, according to The Wall Street Journal. The IRS reports that there are more than 362,000 Americans who will be denied new or renewed passports if they don’t pay off these debts. Enforcement began in February.

IRS Division Commissioner Mary Beth Murphy said that, for now, the agencies are only denying passports to new applicants with overdue debt rather than revoking existing passports. That means that tax debtors who already have passports will be able to travel with them, but they won’t be able to renew. She also said that one debtor paid over $1 million to avoid denial of a passport. An IRS spokesman said that, as of late June, 220 people had paid off their debts in full—handing over $11.5 million in total—and an additional 1,400 had signed installment agreements.

For now, this is the procedure the IRS is following: The agency searches its records for debtors covered by the law and sends a letter to them at the same time it sends their names to the State Department. The letter warns the recipients that their passports won’t be issued or renewed unless the debt is resolved. If the debtors then apply for a passport, the State Department will hold their application open for 90 days; if the debt is not resolved in that time, the debtors will have to reapply. 

Nina Olson, the national taxpayer advocate, has objected to the timing of the notifications to the State Department. She said that because the IRS is notifying the State Department at the same time it warns the tax debtors of the impending passport denial, there may not be enough time for the debtors to resolve the debt and have both agencies lift restrictions. She suggested instead that the IRS warn debtors 30 days before it sends their names to the State Department, noting that this is the procedure that the Department of Health and Human Services uses before denying a passport to someone for unpaid child support. Olson also said that the IRS should provide debtors with information about exemptions from the law, including for emergency and humanitarian situations.

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