• As U.S. Passports For Domestic Flights Loom, IRS Can Now Revoke Passports

    By Robert Wood

    16-03-2016

    In October 2020, the hassle factor for domestic air travel may increase. Soon, your state's driver's license may not be enough to get you through security and on board. In fact, the Los Angeles Times reports that 26 states-including California-do not meet federal regulations. There is an extension of time for these states, through Oct. 10, 2016. But after that, there is worry that your U.S. passport may be needed.

    Now, there is a reprieve until January 22, 2018. Homeland Security Secretary Jeh Johnson has issued a statement that, until then, residents of all states can continue to use their state driver's license for domestic air travel. But by Oct. 1, 2020, every air traveler will need a Real-ID-compliant license, or another acceptable form of federal ID for domestic travel. The Real ID Act created a national standard for state-issued IDs. Some states initially refused to comply, fearing that the federal government would make a national database of citizens.

    It is clear that a U.S. passport will have increasing importance even for domestic travel. And the rise of the passport's importance coincides uncannily with a new law giving the IRS power to revoke passports. Plainly, the easy answer to travel worries may be to dig out your passport, and they are already often in evidence in domestic air check in lines. But what if your passport is canceled because you owe the IRS?

    H.R.22 added new section 7345 to the tax code, titled "Revocation or Denial of Passport in Case of Certain Tax Delinquencies." The idea goes back to 2012, when the Government Accountability Office reported on the potential for using passports to collect taxes. Now that it has become law, the State Department will start blocking Americans with 'seriously delinquent' tax debts. That means anyone the IRS certifies as having a seriously delinquent tax debt in an amount in excess of $50,000.

    Even months after the law passed, administrative details about how it will be administered remain scant. But in all likelihood, it will mean no new passport and no renewal. It could even mean the State Department will rescind existing passports of people who fall into that category. The list of affected taxpayers will be compiled by the IRS, using a threshold of $50,000 in unpaid federal taxes.

    This article originally appeared at Forbes.com.

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  • The information provided in this article is for general information purposes only. The information is not intended to be comprehensive or to include advice on which you may rely. You should always consult a suitably qualified professional on any specific matter.

Robert Wood

I’m a tax lawyer based in San Francisco (www.WoodLLP.com), but I handle tax matters everywhere. I enjoy untangling a tax mess from the past, disputing taxes with the government or planning taxes for the future. One of my specialties is advising about lawsuit payments. Whether you’re receiving or paying a legal settlement, you can probably improve your tax position. I write frequently about taxes, from expatriation to sales tax, from selling your company to restitution. I’ve written over 30 tax books, but my best seller is still Taxation of Damage Awards and Settlement Payments. Contact me at wood@WoodLLP.com.

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