Got serious tax debt? If so, no passport for you, says IRS
Posted on March 5, 2019
The Internal Revenue Service is committed to collecting tax debt. So much so, that as of January, taxpayers owing serious delinquent federal tax debts to the IRS may not be able to renew or obtain a new passport.
In January of last year, the IRS began implementing new procedures aimed at gaining access to the millions of dollars in delinquent taxes some Americans owe the federal government. If you owe $52,000 (including penalties and interest) or more in federal taxes, you may legally be denied your passport application or renewal.
If a taxpayer currently has a valid passport, the State Department may even revoke the passport or limit your ability to travel outside the United States.
If you fall within the confines of this delinquency, you will receive a Notice CP508C from the IRS. This notice explains what steps a taxpayer needs to take to resolve the debt.
If you fall into this category (or owe the IRS any back payments), your Teipen Selanders Poynter & Ayres CPA can help you set up an IRS payment plan. Teipen CPAs recommend that taxpayers act promptly to resolve this issue, as some resolutions take longer than others.
When your debt is paid, or you owe less than $52,000, the IRS will reverse your taxpayer’s certification within thirty days. Once your certification is reversed, your passport will no longer be at risk.
Of course, if imminent or emergency travel is necessary, the IRS can expedite the decertification notice to the State Department, depending on the individual circumstances and taxpayer’s history of paying down delinquent fees.
Before denying a passport renewal or new passport application, however, the State Department must first notify the taxpayer, then may hold the taxpayer’s passport application for 90 days to allow them to resolve any erroneous certification issues or set up a payment arrangement.
Teipen CPAs on how to resolve tax issues
Do you owe back taxes? There are several ways taxpayers can avoid having the IRS notify the State Department of their seriously delinquent tax debt, including:
- Paying the tax debt in full
- Paying down the debt under an approved installment agreement
- Paying the tax debt under an accepted offer in compromise
- Paying the tax debt under the terms of a settlement agreement with the Department of Justice,
- Request a pending collection due process appeal with a levy
- Request an innocent spouse election or innocent spouse relief.
The IRS has set up the following programs for unpaid taxes:
- Taxpayers may download IRS Form 9465 from IRS.gov, a Payment Agreement Plan. You could also use the online payment agreement to set up a monthly payment plan.
- Some taxpayers may qualify for an offer in compromise, an agreement between a taxpayer and the IRS that settles the tax liability for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to decide the taxpayer’s ability to pay.
“Contrary to common thought, the IRS is not heartless,” says Teipen CPA, Jason Keininger, “The IRS will not certify a taxpayer as owing a seriously delinquent tax debt if s/he is involved in bankruptcy, identified as a victim of tax-related identity theft, or whose debt is currently not collectible due to hardship, located within a federally declared disaster area, presently serving the military in a combat zone, has a pending installment agreement or compromise with the IRS, or is deceased.”
For more information, talk to your Teipen Selanders Poynter & Ayres CPA. We can help you get back on track with your unpaid taxes, and back in good graces with the IRS.