Did you get your letter yet? No, not the announcement that you have won a million dollar sweepstakes. The Internal Revenue Service plans to send letters soon notifying certain taxpayers that the agency has certified their delinquent debt. If you are seriously behind on your taxes, this may not be a surprise to you. However, you may not realize that a recently passed law allows the IRS to take drastic measures to claim the money it says you owe.
In 2015, Congress passed a law allowing the IRS to work with the State Department to deny passports to people who are substantially behind on their taxes. The new law is the Fixing America’s Surface Transportation Act. Because the IRS hadn’t worked out the specifics of the FAST Act, the agency did not put it into action right away. However, if you owe back taxes, you may be running out of time.
Will I lose my passport?
The IRS has identified taxpayers who meet certain conditions. These citizens will receive a Letter 508C explaining the reasons why the IRS has certified them as delinquent. The IRS will then send a list of those certified taxpayers to the State Department, and that agency will send separate letters notifying the taxpayers of the restrictions on their passports. Your name may be on the list if you meet the following criteria:
- You owe more than $50,000 in legally enforceable taxes (including any fees, interest or penalties).
- You frequently travel outside the United States.
- You are planning on applying for or renewing a passport.
- The IRS has placed a lien on your property.
- You have exhausted all options for getting the lien released.
- The IRS has issued a levy on your assets.
You have 90 days to get back in good standing with the IRS if you have applied for a new passport. The State Department will hold your application while you work to resolve your debt with the IRS. However, if the State Department has revoked your passport, you will not have a grace period.
How to protect your ability to travel
If you are having tax issues and are concerned about the status of your passport, there are ways to avoid revocation or denial of your application. In fact, if the IRS has agreed to payments in installments or they have accepted an offer in compromise, the State Department will not revoke your passport. In addition, anyone who requests innocent spouse relief may be exempt from revocation or denial.
The IRS plays hardball, using whatever legal tactics it can to get the money it claims you owe. Often, trying to resolve your tax issues on your own does not yield positive results. The most expedient way to settle the problems with your delinquent taxes may be to obtain the assistance of a lawyer. An experienced tax attorney will know the best options for your circumstances and work to protect your travel privileges.