Are you planning a trip out of the country this summer or fall? If you owe the IRS, your travel plans could be put on hold. In cases of seriously delinquent back taxes, the IRS has the legal authority to ask the State Department to deny your passport application or revoke your current passport. Don’t let tax debt ruin your travel plans. Keep reading to learn more about the steps the IRS must take and what you can do to avoid a travel delay.
Tax Debt That Puts Your Passport at Risk
Not all delinquent tax debt will result in denial or revocation of your passport. Certain thresholds must be met. Other types of delinquent tax debt, such as child support, are also not included as part of the certification process.
Tax Debt Threshold
The IRS will only certify seriously delinquent individual tax debt that totals more than $55,000. This includes any unpaid back taxes (including penalties and interest fees) for which a Notice of Federal Tax Lien has been filed or a levy has been issued.
Tax Debt Not Included
Not all tax debt, however, is included when calculating the amount to be certified. The following are exempt from the certification count:
- Report of Foreign Bank and Financial Account (FBAR) penalties,
- Unpaid child support,
- Tax debt being paid under an IRS-approved installment agreement,
- Any tax debt being paid through an Offer in Compromise (OIC) or settlement with the Justice Department,
- Tax debt for which a Collection Due Process Hearing is timely requested (regarding a levy), and
- Any tax debt where collections are suspended because of an Innocent Spouse Relief request.
If you’re in an active bankruptcy proceeding, under Currently Not Collectible status, or a victim of tax-related identity theft, the IRS will not proceed with certifying your tax debt. Additionally, the IRS won’t certify your account as seriously delinquent if any of the following are true:
- You’re located in a federally declared disaster area,
- You have a pending installment agreement request,
- You’ve submitted an Offer in Compromise and are awaiting an answer from the IRS, or
- The IRS made an adjustment that will satisfy your tax debt in full.
The IRS will also postpone certification if you are serving in a designated combat zone or participating in a contingency operation.
How The Passport Denial & Revocation Process Works
Before your passport application can be denied or your current passport revoked, the IRS will send you Notice CP508C. The notice will be delivered to your last known address. If you have an active Power of Attorney (POA), they will not receive a copy.
CP508C is required under Section 7345 of the Internal Revenue Code when the IRS notifies the State Department of any taxpayer who owes seriously delinquent tax debt. Under the Fixing America’s Surface Transportation (FAST) Act, the State Department is then generally prohibited from issuing or renewing a passport when notified about the delinquent account. They may also revoke or place limitations on a current passport.
Before the State Department denies your passport application, it will hold it for 90 days. During that period, you may:
- Resolve any incorrect certification issues,
- Pay your delinquent tax debt in full, or
- Make payment arrangements with the IRS.
If you fail to take any of these actions within the requested timeline, your application will be denied.
In some cases, the IRS may ask the State Department to revoke your passport. Before this happens, however, the IRS will send you Notice CP508C followed by Letter 6152. Once you receive Letter 6152, you will have 30 days to resolve your tax debt with the IRS or provide evidence that the revocation process was improper or that an exemption should apply.
How to Protect Your Passport
The easiest way to prevent your passport application from being denied or having your current passport revoked is to pay your tax debt in full immediately. For some people, however, this isn’t feasible. Thankfully, you still have options to ensure your passport is protected.
If you agree with the amount owed:
- Request a Payment Plan – Submit Form 9465, Installment Agreement Request and Form 433-F, Collection Information Statement, or ask a tax professional for assistance. This allows you to pay the tax debt off over several months or years.
- Submit an Offer in Compromise – You may be able to settle your tax debt for less than you owe if the IRS believes paying it in full would create a financial hardship.
- Apply for Currently Not Collectible status – Once approved, all collection actions (except tax liens) are put on hold and your passport will no longer be in jeopardy.
Disagree with the amount owed or think the certification is incorrect?
- Contact the phone number listed on your Notice CP508C (855-519-4965) to contest the amount due, or
- File a suit in U.S. Tax Court or a district court if you think the certification is erroneous.
Traveling Soon? Act Fast!
Are scheduled to travel outside the United States within the next 45 days? You’ll need to resolve your passport issues promptly. The IRS can expedite the reversal of your certification once you have an approved plan in place to address your tax debt. Additionally, you need to provide proof of imminent travel. These can be documents showing dates and locations of travel, such as cruise or airline tickets. You’ll also need to provide a copy of the letter from the State Department denying your application or revoking your passport.
Don’t risk ruining your travel plans, speak with a tax professional today to see if you qualify for tax relief. For a free consultation, call Tax Defense Network at 833-803-4222 today!