Don't let clients get grounded by a tax debt.

• Author: Moore, Daniel T.

A long flight from Munich to Atlanta after spending Christmas in Austria gave the author a perfect opportunity to read all the pages in his passport for the first time since obtaining one more than 20 years earlier.

The fifth page of the U.S. passport makes it quite clear that it is U.S. government property that citizens have the privilege of holding:

U.S. Government Property: This passport is the property of the United States (Title 22, Code of Federal Regulations, and Section 51.9). It must be surrendered upon demand made by an authorized representative of the United States Government. Taxpayers who have delinquent tax debt run the risk of having their passport revoked. On Dec. 4, 2015, the Fixing America's Surface Transportation (FAST) Act, P.L. 114-94, enacted Sec. 7345, which requires the IRS to notify the State Department of an unpaid tax debt and requires the State Department to deny, revoke, or limit the use of that individual's passport. Taxpayers are at risk of passport revocation if they have "seriously delinquent tax debt."

Under Sec. 7345(b)(1), a "seriously delinquent tax debt" is an unpaid, legally enforceable, and assessed federal tax liability of an individual, greater than $50,000, and for which:

* A Notice of Federal Tax Lien has been filed under Sec. 6323, and the taxpayer's right to a hearing under Sec. 6320 has been exhausted or lapsed; or

* A levy has been issued under Sec. 6331.

Under Sec. 7345(f), the $50,000 amount is adjusted for inflation. This amount is $52,000 for 2019.

The $52,000 threshold is calculated by aggregating the total amount of all current tax liabilities for tax years meeting the criteria under Sec. 7345(b)(1). This threshold includes all penalties and interest calculated on the balances due. In 2019, a self-employed taxpayer who is three years delinquent could easily reach the $52,000 threshold.

Some mitigating circumstances can apply for taxpayers whose delinquent taxes exceed this amount. Sec. 7345(b)(2) provides that a seriously delinquent tax debt does not include the following:

* A debt that is being timely paid under an IRS-approved installment agreement under Sec. 6159;

* A debt that is being timely paid under an offer in compromise accepted by the IRS under Sec. 7122;

* A debt that is being timely paid under the terms of a settlement agreement with the Justice Department under Sec. 7122;

* A debt in connection with a levy for which collection is suspended because of a request for a due...