Tax debt can lead to some pretty serious ramifications. In some situations, it can even impact the ability to travel. Although those with significant tax debt could likely still take domestic trips like a road trip to the beach or a getaway into the mountains, the federal government can put a stop to bigger travel plans.
How can the government control my travel?
Those looking to leave the United States generally need a valid passport. Without one, it is very difficult to leave the country, enter a destination country, and then return to the United States. This is the primary tool the government can use to impact travel plans.
The U.S. State Department can deny or revoke a passport if an individual owes $59,000 or more in tax debt or if the Internal Revenue Service (IRS) has filed a tax lien or levy. These enforcement actions are part of broader IRS collection efforts that may follow unresolved audits or unpaid balances.
Are there any exceptions?
Some taxpayers may still be able to use their passport despite significant tax debt. Examples include those who have a tax lien or levy but are in an approved payment arrangement, such as an installment agreement, or those going through bankruptcy proceedings.
Being proactive can make a meaningful difference. Taxpayers who address balances early may avoid the most severe collection actions discussed in guides on liens, levies, and repayment plans.
Can I fight back?
Taxpayers can potentially take the matter to court. Unfortunately, courts have consistently ruled in favor of the IRS when statutory requirements are met. This makes early intervention—before liens, levies, or passport certification—especially important.
What is the best way to handle this type of situation?
It is generally best to review the underlying tax issue and make sure you are in compliance with applicable tax laws. In many cases, large tax debts stem from prior audits or unaddressed notices. Understanding how an IRS audit typically concludes can help taxpayers anticipate next steps.
Once in compliance, the IRS may still claim that you owe overdue taxes, penalties, and interest. At that point, there are generally two options:
- Legal challenge. Taxpayers who disagree with audit findings may pursue appeals or litigation.
- Repayment options Others may focus on resolving the balance through structured payments or settlement strategies, especially if full payment is not realistic. For some, reviewing options when a tax bill cannot be paid can provide clarity and relief.
The attorneys at Goldburd McCone are experienced in both audit defense and tax collection matters. They can review your situation, explain available strategies, and help you act quickly to reduce the risk of travel restrictions and other serious consequences.