Today the world is more accessible than ever before. Whether you travel for work, family or play, there is a pleasure to be had in discovering what is out there. Some of the excitement for travel rests in planning the trip, getting on the plane and seeing your first sites in a new location. Despite all that planning and anticipation, there’s one thing could hold you up before you even step on the plane — your tax debt.
So, how does tax debt affect your ability to travel? The IRS recently reminded taxpayers that they will notify the State Department if you have “seriously delinquent tax debt” totaling more than $52,000. If the IRS notifies the State Department of your unpaid tax debt, the State Department could revoke an existing passport or deny new applicants.
According to CNBC, the IRS has notified nearly half a million taxpayers of delinquency that could affect their passport. The people who could be most threatened by the revocation of their passport includes ex-pats and people with family members overseas.
The IRS will work with you if tax debt threatens your passport
Revocation of your passport is a serious hold up to your travel plans, and the IRS will work with you once you have been notified of possible revocation or denial. According to the IRS, the agency is required to inform you in writing that they have certified your debt to the State Department. Once you receive this notice, you have three options:
- Pay the tax debt in full or organize a payment plan
- Act to remove the delinquency
- Show that the IRS made a mistake
Receiving a letter from the IRS is something to take seriously. Although you may feel pressured to comply with what is outlined in the letter, you can and should explore all your options before acting. You may qualify for an exception to the policy or have your tax debt reduced even if you have seriously delinquent tax debt.
Exceptions to this policy include:
- Military service members deployed to a combat zone
- People going through bankruptcy
- People who were recently affected by a natural disaster
- Victims of identity theft
You wouldn’t travel without a plan, so you shouldn’t be without a plan to resolve your tax debt either. When tax debt affects your passport, it is time to explore your options to resolve the issue.