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20 February 2018

The IRS Is Taking Away Passports

The IRS Is Taking Away Passports
If you’re severely behind on your taxes, the IRS may ground you from leaving the country until you pay up. Last month, the agency announced

that it will start notifying the State Department of taxpayers who owe a “seriously delinquent tax debt.” The State Department, in return, is required to deny that individual a passport application or renewal. In some cases, a passport can even be revoked.

The new procedure will apply to those who owe the IRS more than $50,000 in back taxes, penalties, and interest for which the IRS has filed an official Notice of Federal Tax Lien and the period to challenge it has expired, or the IRS has issued a levy. The $50,000 or more tax bill includes all applicable tax years combined (not just for one tax year), and it includes all tax debts including those for non-U.S. assets.

Of course, paying the debt in full will eliminate your risk, but so can qualifying for an approved installment agreement, being accepted for what the IRS calls an offer in compromise (a settlement for less than the full amount), and a few other specific arrangements. Passports will not be at risk for certain individuals including those who are serving in combat, in bankruptcy, victims of identity theft, or facing other hardships.

Losing your passport won’t come as a surprise. If you’re at risk, the IRS will have contacted you several times about your debts. Your final indication will be Notice CP508C, “Notice of certification of your seriously delinquent federal tax debt to the State Department.” If you reside or travel extensively outside the country, make certain that the IRS always has a relevant mailing address to ensure you don’t miss notices). Ignoring the problem may lead to an abrupt end to your jet-set life. If you have specific questions, feel free to contact us.

Image Copyright: grinvalds / 123RF Stock Photo


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