10202018Sat
Last updateFri, 19 Oct 2018 7am

US citizens with tax debt may be barred from new passports

Courtesy of Senator Orrin Hatch (R-UT) and your Congress, it is now law.  Those with “seriously delinquent tax debt” (greater than US$50,000) risk having their U.S. passports not renewed or revoked. The tax provision was part of the Transportation bill President Obama signed into law on December 4.

Don’t be fooled by the seemingly “large” number.  It is remarkably easy to rack up US$50,000 over one or more tax years. Interest and penalties also count.

If your passport expires within the next year or two, file for a renewal right away. The typical window for renewal is the preceding year but one is entitled to it any time.  If you end up on the list, the State Department will definitely not renew.  Renewing now may be advantageous while a list is not yet compiled.  Under the new law, revocation is not automatic (The State Department “may” revoke, but “shall” not grant renewal.)  You may end up having a “good” passport for the duration of the existing one.

Of note, the law now requires a valid Social Security number on passport applications.

Hang on to old passports.  They serve as evidence of citizenship when returning to the United States.  A U.S. citizen has the absolute right to reenter, and an expired passport may provide evidence of citizenship at the U.S. Port of Entry.

The IRS must issue a notice to you of certifying the debt as “seriously delinquent”.  A taxpayer can go to court for review … and the passport may stay alive during that time.  Those with foreign addresses know that mail is sometimes not delivered.

In attempting to look like it created a “fair” process to take the right to travel away, Congress created some “due process” provisions. Affected citizens have the right to review in “regular” federal court or the U.S. Tax Court.

For those with dual nationality, the second passport may be critical as a travel document abroad, but useless to return to the United States 

Orlando Gotay is a California licensed tax attorney (with a Master of Laws in Taxation) admitted to practice before the IRS, the U.S. Tax Court and other taxing agencies.  His love of things Mexican has led him to devote part of his practice to the tax matters of U.S. expats in Mexico.  He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..">This email address is being protected from spambots. You need JavaScript enabled to view it..

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