IRS can now revoke U.S. passports over back taxes

Aug. 14 (UPI) -- The Internal Revenue Service has instituted changes that enables the U.S. State Department to revoke American travelers' passports if they owe a substantial amount of back taxes.

The IRS announced the change this week, which says the government can suspend passports for any citizen who owes more than $52,000. It's a move long considered by the agency to motivate Americans to settle their tax debts.

The IRS said unresolved cases that exceed the $52,000 threshold will be passed on to the State Department. Debtors will have 30 days to respond.

More than 400,000 people so far have been notified that their passports are at risk, and a revocation would mean they cannot travel outside the United States.

"When the IRS certifies a taxpayer to State as owing a seriously delinquent tax debt, the taxpayer receives a Notice CP508C from the IRS," the tax agency said. "The notice explains what steps the taxpayer needs to take to resolve the debt.

"The IRS may also ask [the State Dept.] to revoke a passport if the taxpayer could use offshore activities or interests to resolve their debt, but chooses not to."

The IRS laid out several ways to satisfactorily address the debt, including its payment in full or in agency-approved installments.

Experts say the change could cause a substantial problem for Americans already away from home.

"Our biggest concern ... is that a client who is overseas will get hit with one of these letters, never see it and have their passport canceled," immigration attorney at Withers Reaz Jafri told CNBC Wednesday. "It can easily happen that a client returning to the U.S. finds out at the border that their passport is canceled and the only way to get it back is to settle the debt."

Visas and work permits are unaffected by the change.