Pay Your Taxes or Lose Your Passport

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January 20, 2016 by Lisa Brammer

Last month I wrote a blog about the FAST Act (Fixing America’s Surface Transportation Act) and how it contains a provision that requires the IRS to use private debt collection agencies to help recover certain types of unpaid tax debt. Well, this same piece of legislation also gives the U.S. State Department the ability to refuse the issuance of U.S. passports to individuals with large amounts (in excess of $50,000) of tax debt. Section 7345 of the tax code is called “Revocation or Denial of Passport in Case of Certain Tax Delinquencies.” And as the name suggests, the State Department not only has the power to deny applications for new passports, they are also able to revoke previously issued ones.

This is not the first time passports have been used as a tool to collect money. For many years, federal law has restricted the issuance of passports to parents who owe $2500 or more in unpaid child support.

In 2011, the General Accounting Office released a report on passports issued in 2008. Their analysis found that out of the 16 million individuals applying for passports that year alone, over 1 percent (224,000) owed over $5.8 billion in unpaid federal taxes.

Can you imagine the financial implications when you compound that number annually?

Right now the federal government is sitting on $380 billion in unpaid tax debt and this law gives them a new way to provide debtors with an “incentive” to pay overdue taxes. If you want to travel, you’ve got to pay your taxes.

For residents of several states, we aren’t just talking about international flights. Presently there are 13 states (including neighboring Illinois and Minnesota) that do not comply with the standards written in the REAL ID Act. It won’t be long before air travelers (with a non-compliant driver’s license or state I.D. card) will have to obtain an alternate acceptable form of I.D such as a passport.

Founded in 1950, United Credit Service, Inc. is a full service, licensed revenue cycle management and debt collection agency in Wisconsin providing effective, customized one on one management and recovery solutions for our business partners. Visit our website at, call 877-723-2902 or check out our YouTube video.



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