Revoked Passport Due to IRS Debt
Even while sticking one’s head in the sand rather than addressing the issue of tax debt following an IRS audit may seem easier, it should be resolved as soon as possible. Especially if a taxpayer wants to be able to travel worldwide at will, needs to travel for employment. Or has travel plans.
This essay will go through how serious tax issues, unfiled tax returns, and growing tax debt can result in the IRS revoking your passport.
Issuing a Passport
Serious tax debt and delinquency may cause the Internal Revenue Service to alert the State Department to revoke your right to travel internationally by issuing a passport. According to the Fixing America’s Surface Transportation (FAST) Act, the IRS is required to inform the State Department (State) of any taxpayers who owe $52,000 or more in back taxes.
In cases when a notice of federal tax lien has been filed, all administrative legal remedies have been exhausted. And a levy has been imposed, the IRS will also certify substantially delinquent unpaid tax liability to the State Department.
The State is then required by law to reject new or renewed passport applications. The State Department will hold your application for 90 days, giving you the chance to fix any certification problems, pay off all of your tax debt, or agree to a payment plan with the IRS. Before dismissing your request for a passport.
If the IRS certified your obligation to the State Department under the first option, you have the choice to file a lawsuit in a U.S. District Court or the U.S. Tax Court. This enables the tax court to decide whether the certification was accurate or whether the IRS disregarded a request to correct it.
The State may also restrict a taxpayer’s ability to travel outside the country or revoke their passport if it is current and valid.
Thankfully, there are several options for people to prevent the IRS. All from informing the State of their badly overdue tax bill. These are a few of them:
- Complete repayment of the tax debt
- Timely payment of the tax bill under a valid installment agreement
- By an agreed offer in compromise, paying the tax bill on time
- Prompt payment of the tax bill by the provisions of the US Justice Department’s settlement agreement
- Having a levied collection with a pending due process appeal
Additionally, by making the taxpayers aware of the issue, one or more relief programs, such as a payment plan, can be applied for (and likely approved for). Form 9465 can be completed online at IRS.gov and mailed with the taxpayer’s tax return, bill, or IRS notice. If accepted, the taxpayer can set up a monthly payment arrangement through the Online Payment Agreement system. Saving time, money, and even one’s travel privileges!
Applying for an Offer in Compromise, an arrangement between a taxpayer. And the IRS whereby the tax burden is settled for less than the full amount owed is another choice. To assess a taxpayer’s financial capacity, the IRS considers both their income and their assets. The Offer in Compromise Pre-Qualifier tool can be used by taxpayers to determine their eligibility for an offer in compromise.
Finding a solution is more crucial than trying to run away from tax debt. It won’t go away, and there could be some very bad repercussions. To keep their passports from being in jeopardy, taxpayers must pay off their hefty tax burden.
Anyone who owes taxes should get in touch with the IRS right away to prevent delays with their vacation arrangements. To get back on track, get in touch with our tax specialists at Your Part Time Accountant.