Federal Courts continue to reject constitutional challenges under the 5th Amendment to Section 7345, passed as part of the “Fixing America’s Surface Transportation Act” in 2015. The law gives the U.S. government the authority to revoke U.S. passports or reject passport applications for individuals who have delinquent tax debts in excess of $52,000, provided such debts have been certified by the Internal Revenue Service. The law does not give the enforcement authority to the IRS, but rather provides a mechanism for the IRS to refer the case to the State Department which does have such authority.
Section 7345 gives taxpayers several ways they can work with the IRS to avoid the certification of their delinquent tax debt and referral to the State Department. These potential remedies are outlined on the IRS website and include negotiating in good faith, initiating instalment plans to pay down the debt, or a bankruptcy filing.
For more information on this topic, please reach out to Withum’s International Tax Services Team.