IRS Taxes Debt and Passports

If you have “seriously delinquent tax debts”, the State Department may not renew your passport or issue a new passport. The State Department can even revoke or limit your passport to return travel only. This a new procedure that the IRS began in January, 2019 to assist in collecting past-due taxes. The IRS is required to notify you in writing when it certifies your tax debt as seriously delinquent to the State Department. Your notification will be done via Notice CP 508C sent by regular mail to your last known address. If you have a tax professional with a valid power of attorney, they will NOT receive a copy of your notice CP 508C.

The key definition question being: What is seriously delinquent tax debt? A seriously delinquent debt is defined as follows: a) Legally enforceable unpaid federal tax debt of more than $52,000 (including interest and penalties) to be adjusted annually for inflation; b) Notice of federal tax lien has been filed and all administrative remedies under IRC section 6320 have lapsed or been exhausted or a levy has been issued.

Some tax debt is not included in determining seriously delinquent tax debt even if it meets the above criteria, including:

• Tax debt being paid timely with an IRS-approved installment agreement;

• The IRS accepts an offer in compromise to satisfy the debt;

• The Justice Department enters into a settlement agreement to satisfy the debt;

• Collection is suspended because you request innocent spouse relief under IRC section 6015;

• You make a timely request for a collection due process hearing regarding a levy to collect the debt.

Additionally, taxpayers in the following situations will be safe from passport problems:

• Taxpayers in bankruptcy

• Taxpayers identified by the IRS as victims of tax-related identity theft

• Taxpayers debt determined by the IRS to be non-collectible due to hardship;

• Taxpayers who are located in a federally declared disaster area;

• Taxpayers who have a pending request with the IRS for an installment agreement;

• Taxpayers who have a pending offer in compromise with the IRS;

• Taxpayers who have had the IRS accept an adjustment that will satisfy the debt in full.

The State Department will notify you in writing, if your passport is denied or revoked. If you have a job that required a U.S. passport, once your tax debt is certified seriously delinquent tax debt, then you have to fully pay the balance or make an alternative payment arrangement to have your certification reversed.

If you need assistance, please call us at 256-539-9850.

Bowman Law Firm, Tax Attorney