Yes, and let me tell you why and how.
There are many negative consequences associated with unpaid taxes, especially if they have been building up over the years. Tax debt brings many unwanted penalties and interest. One of the biggest consequences one may face for tax debt is the revocation, cancellation, or limitations to their passport.
Under the Fixing America’s Surface Transportation Act, Public Law 114-94 (FAST Act), as of December, 2015, the IRS holds the right to recommend to the State Department to revoke or deny one’s passport in cases of serious “delinquent tax debt.” This means that if a person owes the IRS more than $50,000 in tax to the IRS, they could lose their passport.
The $50,000 includes all penalties or interest accumulated on a person over the years. $50,000 might seem like a rather large amount, however, it is important to remember that interest collects quickly, and it is always best to work with a trusted CPA to ensure you are paying the correct amount in taxes and by all necessary deadlines.
Although the revocation or denial of one’s passport seems like a steep price to pay, it is a good reminder (along with fines and penalties) that it’s always best to pay taxes on time and in full amounts. No person wants their passport taken away or denied!
Contact us if you or someone you know owes IRS tax, penalties and interest.
Also read about Foreign Earned Income Exclusion and The Delay of Tax Refunds in 2017
