If You Owe Back Taxes, the IRS Can Revoke or Deny Your Passport
In 2019, the IRS officially announced an urgency for taxpayers to settle their tax debt or their passports would be at risk of revocation or denial. The following article is designed to help you learn more about IRS Passport Revocation, and how J David Tax Law can help settle your tax debt and get your passport eligibility status reinstated.
The Story Behind IRS Passport Revocation
President Obama, in 2015, signed into law the Fixing America’s Surface Transportation Act, or FAST Act. This was the first Federal Law in over 10 years that provided long-term funding for America’s highways and transit lines. Because tax dollars are used for these types of critical transportation projects, the FAST Act includes the ability for the IRS to notify the State Department when taxpayers have “seriously delinquent” tax debt.
What is ‘Seriously Delinquent’ Tax Debt?
Seriously delinquent tax debt is tax debt that meets or exceeds $52,000 (including interest and penalties) and either a federal tax lien or levy has been issued against the taxpayer. Once the IRS has determined your tax debt as meeting their definition of “seriously delinquent”, the Internal Revenue Service Code Section 7345 allows for the IRS to provide that information to the U.S. Department of State. The State is required by law to deny your passport application or renewal. Further, the IRS will also issue a Notice CP508C to you at your last known address. Once you have been sent this notification from the IRS, the State will generally not renew or issue a new passport. The State may also remove or limit your passport if it has previously been issued.
What If You Can’t Pay the Full Amount?
The fastest way to resolve IRS Passport Revocation is to pay the tax debt in full. If you are unable to pay the tax debt in full, our tax attorneys can work with you to create a customized tax resolution strategy that helps you pay off your tax debt and reinstate your passport eligibility status. A few tactics that we utilize for our clients include:
• Affordable IRS Repayment Plans / Installment Agreements – Our tax attorneys can work with the IRS to structure an affordable IRS repayment plan that allows you to satisfy your tax debt through monthly payments.
• Offer in Compromise – The most comprehensive way to deal with unpaid IRS tax debt is an Offer in Compromise. The best candidates for an offer in compromise include taxpayers who have a marginal net income and have very little or no equity in their assets are the perfect candidates for an offer in compromise.
• Innocent Spouse Relief – If a tax debt has been attributed to your spouse and you had no knowledge of his or her failure to report income or overstate deductions, Innocent Spouse Relief may be an option for reinstating passport eligibility status.
Let Us Help Resolve Your Tax Debt and Passport-Related Issues
If you are at risk of losing your passport or have received Notice CP508C from the IRS, there are steps you will need to follow to resolve your tax debt and/or reinstate your passport. Contact J David Tax Law today for a customized tax resolution strategy that works for you and your family.
We provide tax solutions for our clients who have IRS and state tax debts, unfiled returns, audits, etc. We advise you on future compliance that enables your individual or business tax problems to be behind you for good.