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How Can Tax Debt Affect My Passport?

How Can I Undo IRS Passport Revocation?

As we observed previously, there are considerable parallels between losing your drivers’ license for non-driving reasons and losing your passport for non-travel reasons. The IRS cannot suspend your license, because it is a federal agency with no jurisdiction in that area. But your U.S.-issued passport is another matter.

Courts have consistently held that traveling abroad is a privilege and not a right. That stance allows government agencies to invent their own rules when it comes to things like IRS passport revocation.

The idea behind the new IRS passport restrictions is simple. The Service believes that non-financial threats are a better way to get some people to pay. But like the financial threats, about the only way for something bad to happen is for the taxpayer to do nothing. So, IRS passport revocation may be difficult to undo, but it is certainly not impossible.

Reversing Adverse Passport Action

In almost any venue, the easiest way to undo a law’s effects is to use the law itself. Fortunately, under Section 7345 of the Tax Code, there are several ways to undo a certification of adverse action. They are:

  • Erroneous Certification: In an agency the size of the Internal Revenue Service, it is not usual for the right hand not to know what the left hand is doing. One office usually handles the taxpayer’s account, and another office in another city handles IRS passport revocation. Tax defense attorneys always try to provide what their clients need. Sometimes that’s a court order and sometimes it’s a cell phone.
  • Collections Statute f Limitations Expires: Once the SOL  (statute of limitations) expires, all bets are off. The IRS can take no further direct actions to collect the debt. Agents can, however, sell the account to a debt-buyer. But that’s the subject of another post entirely.
  • Retroactive Exception: As discussed in a previous post, the IRS cannot certify an account as seriously delinquent if the taxpayer is current in an installment agreement, has requested innocent spouse relief, or is slated for a CDP hearing. If the taxpayer falls into one of these exceptions after the IRS passport revocation, the Service will reverse the curse.
  • Full Payment: This reversal does not apply very often. The taxpayer must pay the entire balance due, which is at least $51,000 before the IRS will take back the action because of payment. Just paying down the debt below the threshold is not enough.

An experienced attorney can expedite this process as much as possible. Communication issues and the approval process can delay things for months. But you need your passport now and not next year.

This procedure is the best and fastest way to undo IRS passport revocation. But there may be additional relief available through the courts, and we’ll examine that in a future post.

Have questions? Contact Venar Ayar.


Venar Ayar

Venar Ayar

Ayar Law’s expertise is not only in dealing with the tax code, but in favorably resolving Federal and State tax problems. We know the procedural rules inside and out, and we know how things actually work at the IRS. Feel free to call or email Venar Ayar anytime (no charge) and he’ll be happy to answer any tax law questions you might have. 248.262.3400

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One thought on “How Can Tax Debt Affect My Passport?

  1. Avatar andy05 says:

    You wrote: “Courts have consistently held that traveling abroad is a privilege and not a right.” Not so consistently: Worthy v. United States, 328 F.2d 386 (5th Cir. 1964) (journalist refused passport facilities for travel to Cuba and China; fundamental right of free ingress held infringed, citing many earlier cases on right to travel). But I agree in today’s United States cancellation of a passport for extraneous reasons would be upheld. No surprise then, the business of tax expatriations and economic and ancestral citizenships being at such a premium when $10,000 penalties are bandied about without ado.

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