Abstract: Taxpayers
with large, outstanding tax bills need to watch out. The U.S. State Department
could deny a passport application, or revoke or limit a current passport, if
the IRS certifies that an individual has a seriously delinquent tax debt. This
brief article provides more information.
A large
unpaid tax bill could put your passport at risk
Most Americans aren’t using their
passports right now. But it’s still important to remember that, if the IRS
certifies that you have a seriously delinquent tax debt (SDTD), your passport
application could be denied, or your current passport could be limited or
revoked.
You have an SDTD if 1) you owe more than $53,000 (as indexed for
inflation) in back taxes, penalties and interest, 2) the IRS has filed a Notice
of Federal Tax Lien, and 3) the
period to challenge the lien has expired or the IRS has issued a levy.
Should you find yourself in this situation, there are several steps to
take to avoid losing your passport. First, obviously, you can pay your tax debt
in full immediately. If that’s not possible, you may be able to pay your debt
on a timely basis according to an approved installment agreement, accepted
offer in compromise or settlement agreement with the Justice Department.
Requesting a collection due process hearing regarding a levy, or having
collection suspended through a request for innocent spouse relief, may also
enable you to retain your passport. More important, the IRS won’t likely
notify the U.S. State Department of an SDTD during a federally declared
disaster, such as the one we’ve experienced this year, or in the case of
bankruptcy, identity theft or other hardships. Contact us for more info.