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If You Need to Obtain or Renew Your Passport – Be Sure to Resolve Your Tax Issues First

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Under a new IRS policy, taxpayers with unresolved tax issues could be barred from renewing or obtaining a passport. For this reason, taxpayers who wish to avoid delays to their travel plans should take prompt action to resolve any tax concerns. For help identifying and resolving the tax issues that are keeping you from getting a passport, please contact experienced Florida tax law attorney Ronald Cutler who can advise you.

Notice of Seriously Delinquent Tax Debts  

In January of 2018, the IRS introduced a new passport-related penalty for taxpayers who owe seriously delinquent tax debts. The procedure for issuing this penalty implemented the Fixing America’s Surface Transportation (FAST) Act, and in so doing, requires the IRS to notify the State Department about taxpayers who owe a tax debt and have been deemed seriously delinquent. Under this law, a taxpayer with this type of debt generally owes more than $52,000 in back taxes, interest, and penalties, for which the IRS has previously filed a Notice of Federal Tax Lien and:

  • The IRS has issued a levy; or
  • The period to challenge the lien has expired.

When a taxpayer is deemed to satisfy this definition, the IRS sends a Notice CP508C to the individual explaining the steps that he or she must take to resolve the issue. The State Department is then authorized to deny a taxpayer’s passport application or renewal. In fact, in the event that a taxpayer already has a valid passport, the State Department can revoke it or at least limit the holder’s ability to travel outside of the country. Fortunately, before denying a passport application or renewal outright, the State Department will hold a taxpayer’s application for three months, during which time the person can fully pay off the debt, resolve any errors in the certification process, or enter into a payment arrangement with the IRS.

Resolving the Debt  

Once a taxpayer is made aware of his or her delinquent tax status, that individual can resolve the issue by:

  • Paying the debt in full;
  • Setting up an installment agreement with the IRS;
  • Paying off the debt under an accepted offer in compromise;
  • Coming to a settlement agreement with the Department of Justice;
  • Requesting a collection due proceeds appeal; or
  • Making an innocent spouse election, or requesting innocent spouse relief.

It is important for taxpayers in this situation to refrain from delay, as resolving certain tax liabilities can be time consuming. Once the issue has been resolved, either because the taxpayer paid their debt in full, or came to another payment arrangement, the IRS will reverse the person’s certification as a seriously delinquent debtor within one month. The State Department will then remove the certification from the record, as a result of which, the taxpayer’s passport will no longer be at risk of revocation.

In certain cases, the IRS is willing to expedite the decertification notice, namely when a taxpayer has resolved his or her debt, has a pending passport application, and also has imminent plans to travel, or lives abroad and has an urgent need to return.

Schedule a One-on-One Meeting with a Dedicated Tax Attorney Today  

If you have received notice of an unpaid tax debt and are in danger of having your passport revoked, please contact experienced Florida tax attorney Ronald Cutler, P.A. at 386-490-9949 today for an initial case review.

Resource:

irs.gov/newsroom/irs-urges-travelers-requiring-passports-to-pay-their-back-taxes-or-enter-into-payment-agreements-people-owing-51000-or-more-covered

https://www.hotlineforhelp.com/e-filing-cash-transaction-reports/