How To Avoid Losing Your Passport Due to Unpaid Tax Debts

Imagine you’re getting ready for your summer vacation, you’ve got your bags packed and ready to go, and then you find out the IRS has suspended your passport. Your first thought could be if the IRS can even do that? The answer is yes. It’s the IRS’s new way to encourage taxpayers who are behind on their taxes, to pay what they owe. The IRS has begun to suspend passports for any taxpayer who owes a certain amount in taxes. 

The Fixing America’s Surface Transportation (FAST) Act requires that the IRS notify the State Department of taxpayers the IRS has categorized as owing “seriously delinquent tax debts”, which then requires the State Department to deny their passport application or deny renewal of their passport. In some cases, the State Department may revoke their passport. Seriously delinquent tax debt is usually referring to those individuals who owe more than $51,000 in back taxes, penalties, and interest. 

There are several ways you can avoid having your passport revoked or suspended:

• You can pay you tax debt in full
• You can pay the tax debt through an installment agreement,
• You can pay the tax debt through an accepted offer in compromise,
• You can pay the tax debt under the terms of a settlement agreement with the Department of Justice,
• You can have the collection suspended because you have made an innocent spouse election or requested innocent spouse relief.

A passport won’t be at risk under this program for any taxpayer:

• Who is in bankruptcy
• Who is identified by the IRS as a victim of tax-related identity theft
• Whose account the IRS has determined is currently not collectible due to hardship
• Who is located within a federally declared disaster area
• Who has a request pending with the IRS for an installment agreement
• Who has a pending offer in compromise with the IRS
• Who has an IRS accepted adjustment that will satisfy the debt in full

For taxpayers serving in a combat zone who owe a seriously delinquent tax debt, the IRS postpones notifying the State Department and the individual’s passport is not subject to denial during this time.

It is always in your best interest to confront your tax obligations and pay what you owe or compromise a payment agreement with the IRS.  While this can be disheartening, most tax payers do not know all of the relief programs that they could potentially qualify for. If you have a tax debt and are worried your passport may be at risk, Polston Tax can help. Not only can we walk you through the different types of resolutions that are available to you, we can also help you achieve those resolutions by negotiating with the IRS. Our team of tax attorneys can help you resolve your tax issue and make sure it doesn’t affect your ability to travel. Call us today at 844-841-9857 or click here to schedule a free consultation!