TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, April 11, 2011

GAO: 224,000 Passport Recipients Failed to Pay $5.8 Billion in Taxes

GAO Logo The Government Accountability Office yesterday released Federal Tax Collection: Potential for Using Passport Issuance to Increase Collection of Unpaid Taxes  (GAO-11-272):

State issued passports to about 16 million individuals during fiscal year 2008; of these, over 224,000 individuals (over 1%) owed over $5.8 billion in unpaid federal taxes as of September 30, 2008. State is not authorized to restrict the issuance of passports to individuals because they owe federal taxes. In addition, federal law does not permit IRS to disclose taxpayer information, including unpaid federal taxes, to State officials unless the taxpayer consents. In contrast, federal law permits certain restrictions on the issuance of passports to individuals, such as individuals owing child support debts over $2,500. For 2008, the estimated amount of unpaid federal taxes is likely understated because it excludes individuals who have not filed tax returns or underreported income. In addition, according to State officials, State cannot compel a passport applicant to provide a Social Security Number (SSN). As a result, State’s records sometimes did not contain a valid SSN, which is necessary to match passport data to IRS data. Also, the number of passport holders and dollars owed only includes 1 year of passports that were issued, substantially understating the total tax debt for all passport holders.

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I don't like the idea of government allowing or disallowing services to people based upon whether or not they owe taxes. Do you know what's up at a hospital emergency room under ObamaCare and they'll cross-reference what you owe the IRS before anyone has time to lift you onto a gurney. Hospitals will double as medical providers and tax collectors, and you'll get a bill and payment demand from both before you're checked out, assuming that they take you in the first place or that you didn't opt for a "back alley" doctor to avoid that.

Posted by: Woody | Apr 12, 2011 5:54:16 AM

In many states, professional licenses cannot be renewed unless state taxes are current, arrangements have been made to pay overdue, undisputed taxes, or disputes over taxes are being promptly prosecuted toward resolution by the taxpayers. Some states may take this further, requiring tax currency to renew drivers' licenses. The feds should follow suit. Those who seek the benefits of civilization should pay their fair share.

Posted by: Publius Novus | Apr 12, 2011 6:35:20 AM