The Internal Revenue Service has a powerful new tool to help collect tax debts from individuals applying for or using passports for international travel.  The new provisions allow the IRS to coordinate with the U.S. State Department to deny a passport application or revoke or limit the use of a passport held by a “seriously delinquent taxpayer” - - defined as a person owing more than $50,000 of unpaid taxes, interest and penalties.  Taxpayers in payment arrangements with the IRS or those pursuing timely appeals of levies in due process hearings are excluded from the definition of “seriously delinquent.”

The new law, contained in Internal Revenue Code Section 7345, was passed as part of the Fixing America’s Surface Transportation Act in 2015, but will come into operation in March 2017.  Unfortunately, the IRS has yet to issue regulations or other guidance clarifying the new law and procedures.  Individuals with large unresolved tax liabilities will want to take steps to contact and work with the IRS on their tax debts if international travel is a necessity.