GAO: Congress could look to link tax collection, passport issuance

The GAO added that, by the end of fiscal 2010, the IRS had identified $330 billion in unpaid taxes (including interest and penalties), but the actual total of uncollected revenue is probably much higher. It also said that, under current law, the State Department can deny passports to people who owe more than $2,500 in child support but cannot take that step because an individual owes federal taxes.

For its report, the GAO examined the cases of 25 passport recipients, finding one that owed more than $46 million in federal taxes and had gambled “tens of millions of dollars” during the same period their income taxes went unpaid. 

Another taxpayer investigated had close to $40 million in unpaid taxes, after not filing a personal income tax return for four years during the 2000s and being convicted for bank fraud in the 1990s. 

The GAO also reported on a State Department contractor who owed $100,000 in federal taxes, a World Bank employee living overseas who owed $300,000 and did not file income tax returns during the 2000s, and a pair of cases where individuals had assumed the identity of a dead person. 

In all, at least 14 of the 25 passport recipients examined had not filed an income tax return for at least one year, while the IRS had filed a lien against at least 20.