Can the Internal Revenue Service really impact my ability to travel? If you owe taxes to the Internal Revenue Service, especially “seriously delinquent tax debts” the answer is yes, the IRS can impact your travel plans by impacting your passport as discussed below. This article was drafted by a Denver tax attorney to discuss issues related to the IRS reporting your seriously delinquent tax debt to the Department of State and thereafter having your passport revoked or application rejected.
In January of 2018, the Internal Revenue Service announced it will implement new procedures that could impact an individuals ability to obtain or maintain a passport. The IRS stated these new procedures will impact those individuals that have “seriously delinquent tax debts.” Under the Fixing America’s Surface Transportation (FAST) Act, the IRS is required to notify the State Department of certain taxpayers owing seriously delinquent tax debts. The FAST Act also requires the denial of passport applications, renewals of passports and in some cases even the revocation of an individual’s passport.
So what constitutes a seriously delinquent tax debt? Generally, the IRS has defined a seriously delinquent tax debt as someone who has a tax debt to the IRS of more than $51,000. The $51,000 threshold would include tax, penalty and interest for periods whereby the IRS has filed a Notice of Federal Tax Lien or issued a levy, and the taxpayer can no longer properly challenge the lien or levy action.
If you are taxpayer with a seriously delinquent debt to the IRS, you can likely avoid the IRS contacting the State Department by taking the following action(s).
- Pay the debt in full;
- Paying a settlement amount through a tax settlement or offer in compromise with the IRS;
- Paying the tax debt under a formal installment agreement with the IRS;
- Paying the tax debt through a formal settlement with the Department of Justice;
- Suspending collection action by the IRS through an innocent spouse claim; or
- Requesting a Collection Due Process Hearing with a levy.
A taxpayer under the following situations should not be at risk for having their passport rights impacted.
- The taxpayer has filed and is in bankruptcy;
- Is an identity theft victim;
- The taxpayer’s account has been determined non-collectible by the IRS;
- The taxpayer is located in a federally declared disaster area;
- The taxpayer has a pending installment agreement with the IRS;
- The taxpayer has a pending offer in compromise with the IRS; or,
- The taxpayer has an adjustment that with satisfy the IRS debt in full.
In short, to prevent any passport issues if you owe taxes to the IRS, if the tax debt is being addressed, your likelihood of having a passport application denied or a passport revoked is severely lessened.
Please remember this article is for informational purposes only and you should consult directly with your tax attorney regarding any tax matters or questions.