by Patricia Weisgerber, Esq., LL.M.
In 2015, the Fixing America’s Surface Transportation (FAST) Act contained a provision in which the IRS would interact with the State Department to deny or revoke the passports of taxpayers with “seriously delinquent tax debts.” However, details needed to be worked out between the two agencies before the effort could begin.
On January 16, 2018, the IRS sent notification that implementation of the procedures to deny or revoke passports for “seriously delinquent tax debts” would begin during the month of January 2018.
Who Is At Risk?
A taxpayer is at risk if they have a “seriously delinquent tax debt.” .
What Is “Seriously Delinquent Tax Debt?
A “seriously delinquent tax debt” is one in which there is an unpaid, legally enforceable Federal tax liability of more than $51,000 (adjusted for inflation) in back taxes, penalties and interest and:
- The IRS has filed a Notice of Federal Tax Lien and the period to challenge has expired, or
- The IRS has issued a Levy.
How Do You Avoid a Passport Denial or Revocation?
Taxpayers may take steps to qualify under an exception to being certified by the IRS as owing a “seriously delinquent tax debt”:
- Pay the tax in full,
- Make timely payments under an installment agreement,
- Make timely payments under an offer in compromise agreement,
- Make timely payments under the terms of a settlement agreement with the Department of Justice,
- Request or have a pending collection due process appeal with a levy, or
- Have collection suspended under an innocent spouse election or request innocent spouse relief.
There are also other certain instances where taxpayers may not be at risk, such as those taxpayers serving in combat zones and those located in federally declared disaster areas.
What Should You Do If You Have “Seriously Delinquent Tax Debt”
Having a passport application or renewal request denied can be devastating for individuals and families. Many taxpayers rely on their passports for employment purposes or to visit family members who rely on them. If you think you have a “seriously delinquent tax debt” and rely on your passport, the IRS is encouraging taxpayers to contact them right away. If you cannot pay the tax in full, there is the option of entering into a payment program with the IRS. One important fact is there is no transition or “grace period” identified in the notification from the IRS; taxpayers may find themselves subject to these new procedures immediately.
For additional information, see the following:
- Notice 2018-01: Revocation, Limitation, or Denial of Passport in Case of Certain Delinquencies
- Revocation or Denial of Passport in Case of Certain Unpaid Taxes
- Will Travel Insurance Cover This? Your Passport Can Be Denied for Seriously Delinquent Taxes, Patricia Weisgerber, Esq., LL.M., January 6, 2016.
If you need assistance with representation before the IRS on these or other complex tax compliance issues, the tax attorneys at M. Robinson & Company may be able to help. Please feel free to contact us at 617-428-6900 with questions.
The materials in this publication does not constitute legal advice. It is intended for general information purposes only.
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