On December 4, 2015, the Fixing America’s Surface Transportation Act (“FAST Act”) was signed into law, which granted the IRS the power to revoke passports. Under the FAST Act, the State Department is authorized to rescind passports from Americans with “seriously delinquent” tax debts as well as block Americans with “seriously delinquent” tax debts from acquiring new passports. The list of delinquent taxpayers will be compiled by the IRS using a threshold of $50,000 of unpaid federal taxes, including penalties and interest.
These new rules will apply to taxpayers who subject to either a lien of the debt they owe to the IRS or a levy allowing the IRS to seize assets. This new provision does not apply to taxpayers who are in the process of resolving their tax debt with the IRS, such as paying down an installment plan or if the tax debt is currently in dispute, administratively or in court.
It’s important to note that revocation of one’s U.S. passport doesn’t happen immediately. The IRS must first follow examination and collection procedure and the taxpayer’s administrative and judicial rights must either be exhausted or lapsed. Additionally, once a taxpayer has come into compliance or takes the appropriate steps to become tax compliant, the IRS has 30 days to reverse the revocation of the taxpayer’s U.S. passport.