Traveling around the world is already hard enough – and now for those with tax debt, it’s going to be even harder. Starting this month, the IRS is enforcing procedures that will put your passport at risk if you have “seriously delinquent tax debts.”
Why Your Passport Can Be Revoked
Though the law behind this plan has been in place for over two years, the IRS is now ready to implement and enforce the policy. The 2015 Fixing America’s Surface Transportation (FAST) Act states that the IRS can send notice to states to deny, limit, or revoke your passport if you owe delinquent taxes.
Under the FAST Act, an individual has “seriously delinquent” liability if:
- The debt has been assessed,
- Is over $50,000 in back taxes, penalties and interest, and
- A lien has been filed to secure the liability or a levy has been issued to recover the liability due.
Though this amount of debt may seem hard to accumulate, one mistake or ill-advised taxable event can land you there quickly. In the same way, failing to plan for your self-employment income or defaulting on a secured loan can cause the debt to pile up. Fortunately, there are ways to prevent your passport from revocation, even if you meet the criteria above.
How to Avoid and Resolve Losing Your Passport
Passport revoked? It’s not the end of your travels – the IRS and State Departments are able to reinstate your passport if it has been suspended, but only if you’ve paid back your debt or made plans to do so.
Your passport will not be revoked under the following exceptions:
- You are already in a formal repayment plan
- An element of your account is pending appeal
- You have requested other administrative relief (e.g. innocent spouse relief; identity theft)
If you received a notice of passport revocation before you established a formal resolution with the IRS, you can resolve it – but it won’t be overnight. Paying your debt back in full is the quickest way to release your liens and get your passport back, but that might not be an option for you.
Resolve the Issue with Professional Help
You can enter into an installment agreement with the IRS, which can take 30 days or longer to process. A successful Offer in Compromise will also allow your passport to be reinstated; however, this can be a very lengthy and in-depth procedure with strict guidelines. Unfortunately, Currently Not Collectible status (proof of hardship and inability to pay your debt), will not grant you the passport back.
Tax professionals like the team at Tax Defense Network know how to deal with the IRS and State on your behalf, quickly showing proof that you’re getting help. We will help you find the best resolution to your tax debt situation so you can avoid aggressive IRS actions and get your life (and travels) back on track.
For questions on the IRS’s passport policy or any notices you receive, speak to a Tax Solutions Analyst to learn more at (877) 588-1098.