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How a ‘seriously delinquent tax debt’ could get your passport revoked

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2 years ago

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Grace Cary | Moment | Getty Images

Travelers, be warned: The federal government may revoke your passport if you ignore a big tax bill.

Such punishments have become more frequent in recent years, experts said.

Federal law requires the IRS and Treasury Department to notify the State Department if an American has a “seriously delinquent tax debt.”

This is a large federal debt — of more than $62,000 in 2024 — that the taxpayer has repeatedly ignored.

The debt threshold includes aggregate total federal tax liabilities, plus penalties and interest, levied against an individual. It’s adjusted annually for inflation.

The State Department generally won’t issue a new passport and may revoke or limit an existing one in cases of serious delinquency, according to the IRS.

IRS has collected more than $1 billion in tax debt from high-income individuals

The government typically uses this enforcement mechanism — which has been in place since 2018 — as a sort of last-ditch effort to collect unpaid tax levies, experts said.

Should those debts remain unpaid, the potential consequences are ample: Travelers might not be able to take trips overseas until they’ve resolved their debt. Expats and those who travel abroad for business may have to return to U.S. soil indefinitely until their tax case concludes, for example, experts said.

Revoking a passport is “a step of last resort,” said Troy Lewis, a certified public accountant based in Draper, Utah, and an accounting and tax professor at Brigham Young University.

“How do you get rich folks’ attention regarding paying their taxes? Just make sure they can’t summer in Europe,” he said.

‘It gets people to call the IRS’

Demand to travel abroad has surged as the Covid-19 pandemic has waned. Americans applied for about 21.6 million U.S. passports in fiscal 2023 — a record number, according to the State Department.

Todd Whalen, a CPA based in Denver, has seen tax enforcement efforts involving passports ramp up over the past three years.

“This is becoming more and more of a big deal,” said Whalen, founder of Advanced Tax Solutions, which helps consumers and businesses resolve tax debts. “We’ve gotten several [cases] this year.”

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In one instance, a client only found out his passport had been revoked while at the airport trying to fly to Mexico for a trip to celebrate his son’s high school graduation.

“It works,” Whalen said of the collection effort. “It gets people to call [the IRS].”

A State Department spokesperson declined to provide annual statistics on how many taxpayers had their passports revoked or denied. The IRS didn’t comment by press time.

All other collections must have been ‘exhausted’

J. David Ake | Getty Images News | Getty Images

It can be “quite easy” for overdue tax debts to exceed the $62,000 threshold, according to Virginia La Torre Jeker, an attorney who specializes in U.S. international tax law.

Americans living abroad, for example, may have “significant penalties” for not filing various foreign information returns, she said in an email.

Debts can also include any tax levies owed by individuals, she added. Those may be business taxes for which the taxpayer is personally liable or trust fund recovery penalties, she said. (The latter relate to withheld income and employment taxes like Social Security taxes or railroad retirement taxes.)

How do you get rich folks’ attention regarding paying their taxes? Just make sure they can’t summer in Europe.

Troy Lewis

accounting and tax professor at Brigham Young University

However, revoking a passport isn’t generally the government’s first way to collect such overdue debts, experts said.

The IRS must have already “exhausted” all other typical collection activities, said Lewis, owner of Lewis & Associates, CPAs.

Generally, that would mean the taxpayer hasn’t responded to prior IRS notices of a federal tax lien, for example. (A lien is the government’s legal claim to a debtor’s assets like real estate and other personal property. It isn’t a move to collect said property, though.)

Various courts have upheld the federal government’s ability to revoke passports in order to collect tax debts as constitutional, Lewis said.

He pointed to two recent cases as examples: Franklin v. United States in the U.S. Court of Appeals for the 5th Circuit and Maehr v. United States Department of State in the U.S. Court of Appeals for the 10th Circuit.

In the former, the defendant, James Franklin, owed about $422,000 in taxes for failing to file accurate tax returns and report a foreign trust of which he was the beneficial owner. The IRS ultimately filed a tax lien and levied his Social Security benefits, and the State Department later revoked his passport.

“It seems pretty well established this is something [the government] can do,” Lewis said.

Travelers have remedies available

The State Department doesn’t revoke a passport straight away. When the IRS certifies debt as seriously delinquent and alerts the State Department of that, it will mail the taxpayer a notice — CP508C — outlining the potential implications of that classification.

If an individual then applies for a passport, the State Department would generally deny and close that application if the person doesn’t make efforts to pay their debts. Such efforts might include paying the balance in full, entering into a payment plan or making a compromise agreement with the IRS.

The debtor would still be able to use an active passport, if they have one, unless notified in writing by the State Department that their passport had been revoked or limited, the IRS said.

Travelers are finally cracking under the pressure of high costs

“IRS looks at various factors, including taxpayer noncompliance in the past and taxpayer failure to cooperate with the IRS” when opting to revoke a passport, according to La Torre Jeker.

The State Department can limit the passport’s use only to return travel to the U.S., thereby preventing the person “from being trapped in limbo” if outside the country, she said.

The IRS sends taxpayers Letter 6152 before revocation, asking them to call the IRS within 30 days in order to resolve their account and avoid passport cancellation, she added.

Still, sometimes passport denial catches debtors by surprise when they travel, said Whalen at Advanced Tax Solutions.

For example, the IRS may have the wrong address on file — especially if a taxpayer has moved — and mail notices to the wrong place, Whalen said.

“A lot of times, they don’t know they have a balance due until they … show up at the airport,” he said.

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$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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7 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

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2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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