Section 7345 of the Internal Revenue Code
A tax law is on the books that allows the federal government to revoke your passport if you owe back taxes to the IRS.
Before you book that next trip from New York to some warm sunny climate, you may need to make sure that your back tax problems have been resolved.
Failure to resolve your tax problems prior to travelling abroad may result in immigration problems. This articles addresses your issues and concerns about travelling if you owe back taxes.
Section 7345 of the Internal Revenue Code will allow the federal government to revoke your passport if you have a seriously delinquent tax liability.
Also, the same law will prevent you from being issued a passport if owe back taxes to the IRS.
Why the New Tax Law was passed?
The Government Accountability Office saw the potential to collect back taxes if they governed the ability to issue passports.
This bill, signed by President Barack Obama, was passed as part of Fixing America’s Surface Transportation Act, a highway funding bill.
It is now Section 7345 of the Internal Revenue Code.
How Section 7345 of the IRC Will Work
In sum and substance, the IRS can possibly take your passport if you owe back taxes.
First, the IRS will submit certifications of “serious delinquent” taxpayers to the Secretary of the Treasury ( What this means is the IRS will create a list of people that owe back taxes).
Then, the Secretary of Treasury will pass those certifications ( the list of seriously delinquent taxpayers) to the Secretary of State.
When you are sent that certification from the Secretary of State, you will have the right to challenge the certification in Court.
What is a Seriously Delinquent Tax Liability?
A seriously delinquent tax liability means an outstanding tax liability in an amount in excess of $50,000. This amount includes penalties and interest.
For example, you may owe the IRS 25,000 in taxes from tax year 2007.
However, there are penalties and interest that compound the tax liability.
With penalties and interest, your tax liabilities may have easily grown to in excess of $50,000.
As well as owing in excess of $50,000, the federal government must do one of the following prior to revoking or denying your passport:
A Notice of Lien must have been filed in the public records as per Internal Revenue Code Section 6323 or
A Notice of Levy has been filed pursuant to Internal Revenue Code Section 6331
When a tax liability reaches this level, it is almost a matter of course that the IRS has filed a Notice of Federal Tax Lien or has issues a Notice of Levy.
However, a review of your tax problem by an experienced tax attorney will help you determine if either of these collection efforts have been undertaken by the IRS.
