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Is Your Passport at Risk Because of Tax Debt?

July 30, 2018

Passport at Risk

The IRS can send notice to states to deny, limit, or revoke your passport if you owe delinquent taxes.

Check for these five qualities to make sure your tax pro is qualified and the best for you.

Traveling around the world is already hard enough – and now for those with tax debt, it’s even harder. The IRS is now enforcing procedures that will put your passport at risk if you have “seriously delinquent tax debts.”

How Is My Passport at Risk?

Though the law behind this plan has been in place for over two years, the IRS is now implementing and enforcing 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:

  1. The IRS has assessed the debt,
  2. The debt is over $50,000 in back taxes, penalties and interest, and
  3. The IRS has filed a lien to secure the liability or the IRS has issued a levy to recover the liability due.

This amount of debt may seem hard to accumulate. However, 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 having your passport revoked, 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 can reinstate your passport if it has been suspended. However, they will only do this if you’ve paid back your debt or made plans to do so.

Your passport will not be revoked under the following exceptions:

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 reinstate your passport; 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.

MoneySolver knows how to deal with the IRS red tape. We can quickly show proof that you’re getting help with your tax debt situation. Avoid having your passport at risk due to aggressive IRS actions and get your life (and travels) back on track.

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