Could Your Tax Liabilities Lead to Passport Revocation?

December 2, 2015 | By: Miranda Marquit

passport revocationAs the end of the year approaches, Congress is considering different policies and taxes. One of the issues on the table right now is what to do about those who owe a large amount of taxes. Right now, lawmakers are considering the idea of limiting an offender’s passport in order to encourage compliance.

Who Could Have a Passport Revoked?

The measure to possibly revoke a passport as a response to unpaid taxes is tucked away in a bill meant for funding U.S. highways and transit programs. If you owe more than $50,000 to the IRS — including penalties and interest — your passport could be at risk. The measure would allow the government to revoke or deny a passport based on the tax amount, or just limit the passport.

However, not everyone owing so much would automatically have a passport revoked. The new provision would only apply to those with liens or levies against them, and who don’t have a repayment plan in place. If you are actively disputing your case, you might be able to get an exception for the passport revocation. It would also be possible to plead for an exception if you had to travel for emergency purposes.

Some think that the measure is too harsh, since it’s surprisingly easy to see a tax amount of $50,000 because of how quickly penalties and interest can add up. Additionally, those that have complex financial situations due to situations in which they live abroad might be impacted greatly. After all, these folks rely heavily on their passports, not only when traveling to and from the U.S., but also traveling between other countries. A U.S. passport can open a number of doors during country-to-country travel that passports from other countries don’t always offer.

Will this Help Fund U.S. Highways?

It’s not uncommon to find provisions and riders unrelated to a bill tucked away inside legislation. At first glance, this appears like another sneaky way of getting something passed by putting it in a bill that most lawmakers are behind. However, there are hopes that the threat of passport revocation might actually help with highway and transit funding

One of the issues facing highway and transit funding is the fact that Congress decided against raising the federal gas tax. Highway funding issues have been ongoing for months now. Even though relying on gas taxes comes with its own difficulties (especially as cars become more fuel-efficient and electric cars gain in popularity), the refusal to raise the gas tax isn’t helping the current highway funding shortfall.

The passage of this provision, though, could potentially raise $400 million over the next decade as tax delinquents pay what they owe. That could help with the cost of the funding bill, since the gas tax increase isn’t on the table right now.

For now, nothing is set in stone. However, if Congress does add the possibility of passport revocation for taxes owed to the highway funding bill, it will go into effect January 1, 2016.