As we all know, whether traveling for business or pleasure, you need a valid passport for most trips outside the United States. These days, you even need a passport to fly to and from Canada or Mexico.
We want to make sure clients are aware of a new law on the books that requires and/or authorizes the State Department to deny, revoke, or limit your passport if you have “seriously delinquent tax debt.”
Congress enacted a law late in 2015 authorizing the State Department to deny, revoke, or limit a passport for nonpayment of federal taxes. The law applies when you owe more than $50,000 in tax, interest, and penalties. Remember that this amount is cumulative; so if you have several open years that have been recently filed with interest and penalties, it’s easier than it seems to meet the $50,000 threshold.
Technically, you have seriously delinquent tax debt if:
• the amount you owe exceeds $50,000, including interest and penalties;
• the IRS has assessed that amount; and
• the IRS has filed a notice of tax lien, and all administrative remedies have been exhausted or served to you by levy.
The IRS sends you Notice CP508C when it certifies your unpaid taxes as seriously delinquent tax debt to the State Department.
If you receive such a notice, please contact us immediately so that we can help you. Some of the ways that you can reverse this problem are:
• enter into an installment agreement or an offer in compromise that satisfies the amount owed;
• request innocent spouse relief; or
• request a collection due-process hearing following an IRS levy.
Paying down the tax debt to just below the $50,000 won’t work without the above steps.
We hope you don’t find yourself in this situation; but if you do, . . .
Remember that we’re just a click away when you need help.
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