In a drastic if not historic move to collect taxes, Congress recently passed the "FAST Act" that allows the IRS to cause the State Department to revoke or restrict the use of passports of "seriously delinquent taxpayers" (SDTs). In other words, a client who is an SDT on an offshore vacation or business trip could find herself suddenly unable to re-enter the United States or at least unduly detained because her passport has been revoked or restricted because she has "an unpaid, legally enforceable federal tax liability" of $50,000 or more in total, including interest and penalties. This amount can be easily reached through domestic tax liabilities or through foreign tax reporting issues, such as non-compliance with FBAR requirements.

There is a hint of good news however- before a passport can be revoked or restricted, the IRS must assess the liability and file notice and a lien before an individual can be categorized as an SDT. Note that the threshold amount is cumulative of all open years. There are exceptions, including tax debt which is part of:

To put the process in motion, the IRS certifies and sends a list of SDTs to the Secretary of the Treasury. The list will then pass to the State Department. The State Department is then required to carry out the revocation or restriction(s). An individual may appeal, but the appeal would first go through the IRS, then through the Secretary of the Treasury, and finally to the State Department for removal of the SDT from the list, by which time, staying home might be a very attractive option.