Starting this year, tax debts could lead to revoked passports

Beginning in March, people who owe more than $50,000 to the IRS could have their passports revoked.

Beginning in 2017, the IRS will have new tool for going after people with large, delinquent tax debts. As CBS News reports, the IRS will begin enforcing a law that requires it to notify the State Department of people who have seriously delinquent back taxes with the federal agency. The State Department, in turn, will be able to revoke or deny the renewal of a passport to those individuals. Below is a look at who may be affected by the new rules and how people can avoid losing their passport due to back taxes.

Passports at risk

Beginning in March, the IRS will begin enforcing a 2015 law that called for individuals who owe more than $50,000 to the federal agency to be reported to the State Department. That means that individuals who owe at least that amount - which can include penalties and interest - will likely have their name reported to the State Department. The taxpayer will also be notified at his or her last known address about whether their passport has been revoked or subject to other conditions.

In addition to the $50,000 debt, individuals must also have had a tax lien filed against them. Any remedies or relief for that lien must have also either been denied or lapsed. Those who have been issued a tax levy also face passport revocation. Finally, while taxpayers will have 90 days to resolve erroneous certification on the list or to get back into good standing with the IRS, there is no grace period once a passport has actually been revoked.

Keeping one's passport

As Forbes notes, there are a number of ways individuals can avoid losing their passport if they owe more than $50,000 to the IRS. Negotiating with the IRS to ensure that a payment plan is in place can help prevent one from being reported to the State Department. A tax attorney can help individuals negotiate with the IRS or else challenge the IRS's case in tax court.

Additionally, other individuals who are seriously delinquent on their taxes can avoid losing their passports in other ways. For example, those who have settled their tax debts through a Justice Department agreement or offer of compromise, those who make a request for a collection due process hearing, and those who are applying for innocent spouse relief if the debts in question were a spouse's can all be excepted from the list.

Tax law advice

Individuals and businesses who may owe back taxes to the IRS should get in touch with a law firm that is experienced in tax law and knows how to negotiate effectively with the IRS. An experienced law firm can help clients resolve their tax issues in a number of ways, including by negotiating an offer in compromise and representing them in court.