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The U.S. Will Now Bar Tax Delinquents From Travelling Abroad



Charles Rubin, Tax Advisor, Boca Raton, Florida, Tax Blog, TaxConnections

I wrote back in 2015 here about new legislation that gave power to the Secretary of State to deny, revoke or limit the passport of persons with delinquent taxes. Code §7345 provides that the Commissioner of the IRS will provide notice to the Secretary of the Treasury, who will then transmit that notice to the Secretary of State, in regard to a taxpayer’s delinquent tax debt.

Generally, it applies to delinquent tax debt over $50,000 (adjusted for inflation), for which a notice of lien has been filed or a levy has been made. Upon receipt of a Code §7345 certification, §32101(e) of the 2015 FAST Act provides that the State Department will generally deny an application for issuance or renewal of a passport from such individual, and may revoke or limit a passport previously issued to such individual.

In Notice 2018-01, the Treasury Department announced that the IRS and the State Department will begin implementing these provisions in January, 2018. The Notice provides information about the implementation of the rules.

The National Taxpayer Advocate in its annual report to Congress noted the right to travel internationally is a fundamental right of citizenship. Many civil libertarians would assert that the right to travel is more than this – it is a natural right of individuals that is not bestowed by governments, and should be restricted only for security purposes (including immigration and criminal enforcement). Restricting a fundamental and natural human right for the enforcement of civil debt obligations is a new chapter in U.S. tax law, and one that can be expected to give rise to constitutional challenges.

Have a question? Contact Charles Rubin.

Your comments are always welcome!

One thought on “The U.S. Will Now Bar Tax Delinquents From Travelling Abroad

  1. Nononymous says:

    Has the US government given any thought to how this might impact US citizens living overseas, particularly those who have spent their entire lives outside the US and have never been tax compliant?

    For dual citizens, losing the US passport isn’t a big problem, but for those with only one citizenship it could be the end of their residence permits and force them to return to the US and face uncertain futures.

    This law should only come into effect if the US joins the rest of the civilized world and stops attempting to tax its non-resident citizens.

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