The Internal Revenue Service (IRS) has an array of tools it can use to force taxpayers to pay their taxes. One tool: the IRS can suspend your passport. Taxpayers who face such a suspension will receive a Notice CP508C from the IRS.
How can they do this?
Lawmakers recently passed the Fixing America’s Surface Transportation (FAST) Act. A provision within this law requires the IRS to notify the Sate Department if taxpayers are owing “seriously delinquent tax debt.” In most cases, the law defines seriously delinquent tax debt as those who owe over $52,000 in back taxes as well as penalties, fees and interest.
The IRS stated it would begin implementation of these new procedures in January of 2018.
How do the new procedures work?
If a taxpayer’s passport expires and the IRS deems the taxpayer has seriously delinquent tax debt, the State Department will not renew the passport until the tax debt issue is resolved. If the taxpayer has a current passport, the State Department could limit the passport carrier’s ability to leave the country or even revoke the passport.
What can a taxpayer do to get their passport back?
Taxpayers must resolve their pending tax debt issue with the IRS. Options can include:
- Offers in compromise. This option involves the taxpayer making an offer to the IRS that is less than their actual tax debt. The IRS will accept this offer if it deems the requesting taxpayer is unable to pay a larger amount.
- Payment plan. The IRS offers payment plans, referred to as installment agreements. The agency has both long and short-term plans that allow a taxpayer to pay off the tax debt over a set period.
- Due process proceeding. A taxpayer can also deal with this issue through a collection due process appeal. If the request is pending, the taxpayer should receive a valid passport.
In many cases, taxpayers who find themselves with a denied passport application or revoked passport have matters they must attend to in other countries. The inability to travel can cause serious problems with both personal and business matters. An attorney experienced in this niche area of tax law can review your situation and provide guidance on the best way to find a prompt resolution.