If you have “seriously delinquent tax debt,” you should speak with an experienced tax attorney before your next trip out of the United States, or before you try to return. Otherwise, you may be in for an unhappy surprise at the border.
Beginning in January of 2018, the Internal Revenue Service (IRS) notified taxpayers with a certain type of tax debt that their passport or passport application could be in jeopardy if they fail to make arrangements with the IRS concerning payment of the debt.
In response to the Fixing America’s Surface Transportation (FAST) Act, the IRS began notifying the State Department of taxpayers certified as owing “seriously delinquent tax debt.” Understanding this definition is important.
According to the IRS, “A taxpayer with a seriously delinquent tax debt is generally someone who owes the IRS more than $51,000 in back taxes, penalties and interest for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired or the IRS has issued a levy.”
There are certain conditions under which an individual with this type of debt will not be certified to the State Department, including:
- Individuals identified by the IRS as a victim of tax-related identity fraud.
- Those in bankruptcy or located within a federally declared disaster area.
- Debtors with a pending request for an installment agreement, or pending offer in compromise with the IRS. This includes those with an IRS accepted adjustment that satisfies the debt.
The impact of passport denial or revocation
The liberty to move freely is important for those with business and family interests beyond the United States. Possession of a passport can be a condition for employment as well. Under the FAST Act, the State Department is required to deny the passport application of a tax debtor, but they are not required to revoke an existing passport. If you a certified debtor considering travel outside the US or back to the US, it is possible your passport will be revoked, leaving you outside the country without personal documentation.
Options provided by the IRS to avoid denial or revocation of your passport include:
- Pay the tax debt in a timely manner under an approved installment agreement, an accepted offer in compromise, or under terms of a settlement agreement with the Justice Department.
- Pay the tax debt in its entirety.
- Request innocent spouse relief and have collection of the debt suspended.
- Request or already have a pending collection due process appeal with a levy.
In an unstable travel environment, being at risk for having your passport revoked while abroad is a dangerous and inconvenient proposition. If you are certified with seriously delinquent tax debt, speak with an experienced tax lawyer about your case.
Skilled Chicago tax attorneys help you with IRS collection efforts
Serving national and local clients from offices in Chicago and Cleveland, our IRS tax lawyers deliver experienced, aggressive legal representation on matters of tax litigation, IRS audits, criminal tax investigation, and more. When you have questions concerning the IRS or a criminal tax matter, reach out to us at Robert J. Fedor Esq., LLC today.