IRS Tax Debt Could Affect Passport Renewal
As a reminder, individuals with “seriously delinquent tax debts” are subject to a new set of provisions courtesy of the Fixing America’s Surface Transportation (FAST) Act, signed into law in December 2015. These provisions went into effect in February 2018.
The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt. It also requires the State Department to deny their passport application or renewal. In certain instances, the State Department may revoke their passport.
Taxpayers affected by this law are those with seriously delinquent tax debt, generally, an individual who owes the IRS totaling more than $59,000 (adjusted yearly for inflation) in back taxes, penalties, and interest for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired, or the IRS has issued a levy.
What Taxpayers Can Do
Taxpayers can avoid having the IRS notify the State Department of their seriously delinquent tax debt by doing the following:
However, a taxpayer’s passport won’t be at risk under this program if an individual:
For taxpayers serving in a combat zone and who also owe a seriously delinquent tax debt, the IRS postpones notifying the State Department, and the individual’s passport is not subject to denial during this time.
Payment Options for Delinquent Taxes
Taxpayers who are behind on their tax obligations should come forward and pay what they owe or enter into a payment plan with the IRS and may qualify for one of several relief programs, including the following:
The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.