If you owe the IRS more than $50,000, including penalties and interest, you could lose your ability to travel internationally—and maybe even domestically.
5 Key Takeaways
- 1. The IRS can revoke or deny your passport if you owe more than $50,000.
- 2. Penalties and interest count toward the $50,000 threshold, so the total adds up fast.
- 3. Residents in some states may need a passport for domestic air travel under the Real ID Act.
- 4. Exceptions exist for those in repayment programs or facing emergencies.
- 5. Working with tax professionals can help resolve debt and reinstate your passport.
What Is the IRS Passport Law?
In December 2015, a five-year infrastructure spending bill included a provision granting the IRS the authority to limit travel for people with significant tax debt.
If you owe more than $50,000 (including penalties and interest), the State Department can deny your passport application or even revoke an existing passport.
This law is part of the government’s efforts to collect unpaid taxes, but it’s causing concern for many taxpayers, especially those unaware of their growing debt.
How Does It Affect You?
1. Debt Threshold Includes Penalties
The $50,000 limit isn’t just your original tax debt—it includes penalties and interest, which can increase the total quickly. For example, a smaller initial debt can snowball over time if left unpaid.
2. Domestic Travel Could Be Impacted
Residents of Minnesota, New York, New Hampshire, and Louisiana face unique challenges due to the Real ID Act.
If these states don’t comply, residents may need a passport for domestic flights. For tax debtors in these states, this could restrict even domestic air travel.
3. Lower Thresholds in the Future?
While the current threshold is $50,000, it could change. Economic factors and the number of unresolved tax cases might prompt lawmakers to lower the limit, impacting more taxpayers.
Are There Exceptions?
1. Active Disputes
If you’re contesting a tax bill, the restriction doesn’t apply. Active disputes show the IRS that you’re addressing the issue, even if it’s not resolved yet. Filing an appeal or requesting a review can buy you time to avoid travel restrictions.
2. Installment Agreements
Those making regular payments through an IRS program, like an installment agreement, can keep their passports.
These agreements show the IRS that you’re serious about repaying your debt. As long as you stay current with your payments, your passport won’t be affected.
3. Emergencies
In some cases, the State Department may issue passports for emergencies or humanitarian reasons, though the details remain unclear.
This could include situations like medical needs or family emergencies abroad. However, approvals for these exceptions can be unpredictable and depend on the circumstances.
Celebrities like Iggy Azalea, who reportedly owes nearly $400,000, can still travel because they’re on repayment plans. If a public figure can find a solution, it’s a good reminder that resolving tax debt is possible with the right steps.
What Can You Do If You Owe Money to the IRS?
Ignoring tax debt isn’t an option. The IRS has powerful collection tools, including wage garnishments, tax liens, and now passport restrictions.
1. Understand Your Debt
Start by checking your tax transcripts or contacting the IRS directly to confirm your debt total. Remember, penalties and interest often make the actual amount much higher than you expect.
2. Consider Professional Help
Dealing with the IRS can be intimidating. Hiring a tax professional—like a CPA or enrolled agent—can save you time and stress. Tax professionals can help you negotiate repayment plans, challenge incorrect assessments, or even reduce your debt.
Unlike attorneys, services like Direct Tax Relief offer affordable solutions with a full team of experts. You don’t have to overpay for legal representation when a specialized team can handle it.
3. Act Quickly
The sooner you take action, the better. Penalties and interest add up daily, increasing your total debt and the likelihood of passport restrictions.
Why Hire a Tax Relief Professional?
Many people think they can handle tax issues themselves, but navigating IRS rules isn’t easy. A tax relief professional can:
1. Negotiate Favorable Terms
Professionals know how to secure better repayment terms or settle for less than the total owed.
2. Save Time
The IRS process is time-consuming. Experts handle the paperwork and communication for you.
3. Prevent Costly Mistakes
Filing incorrect forms or missing deadlines can worsen your situation.
Read more about choosing the right firm in What to Look for in a Tax Relief Firm.
Can the IRS Reinstate Your Passport?
If your passport is revoked, resolving your tax debt is the only way to get it back. Options include:
1. Paying in Full
This clears the debt and removes restrictions.
2. Entering an Agreement
Setting up an installment plan or an offer in compromise can lift the travel restriction.
3. Appealing the Debt
If you believe the IRS made an error, you can contest the amount owed.
For more details on resolving state tax issues, check out this guide.
How to Check If You’re at Risk
If you’re worried about passport restrictions, start by reviewing your tax records. You can request a transcript directly from the IRS or use an online tax account. This will help you understand your total debt, including penalties and interest.
Once you know where you stand, take action to address any unpaid taxes. The IRS typically notifies you if your debt qualifies for passport restrictions. Acting before receiving this notice can prevent further complications.
The Risks of Ignoring IRS Notices
Ignoring IRS notices can escalate the situation quickly. Unpaid taxes can lead to wage garnishments, tax liens, or even legal actions. Passport restrictions are just one of many enforcement tools the IRS uses.
Delaying resolution also increases penalties and interest, making your debt harder to pay off. Tax professionals can help you respond to IRS notices and avoid further consequences. It’s better to act sooner rather than later.
Need help with tax debt? Visit Direct Tax Relief to learn how professionals can assist you.
Final Thoughts
The IRS passport law is a wake-up call for taxpayers. Owing over $50,000 can restrict your freedom to travel, but it doesn’t have to. With the right help, you can resolve your debt, protect your rights, and avoid these restrictions.
Direct Tax Relief offers affordable, professional assistance to help you navigate IRS challenges. Call today to get started on restoring your financial freedom.
