Do you owe the IRS back taxes? Then, you may be in jeopardy of losing your passport depending on how much you owe. Under federal law, if you owe the IRS a “seriously delinquent” tax debt, you will not be able to get or renew a U.S. passport unless you meet certain conditions. Once the U.S. State Department receives “certification” of such tax debt from the IRS, it will not issue a new passport or renew an existing passport. In addition, under IRS 7345, the State Department can restrict the use of a passport or revoke it entirely.
What is “Seriously Delinquent Tax Debt”?
The definition of a “seriously delinquent IRS tax debt” is an unpaid, legally enforceable federal tax debt of at least $52,000 which includes interest and penalties. If you meet these criteria, the IRS now has the authorization to take action, working with the State Department, to deny or delay your passport application. If you already have a valid passport, it may be revoked. And if you are already overseas, your passport may be limited to only allowing a direct return to the United States.
For many Americans working overseas that rely on a passport for a job or travel.
Amount Adjusted for Inflation
With a “seriously delinquent tax debt” amount, it must be adjusted annually for inflation and the IRS can only notify the State Department of your tax debt for the following reasons:
- Federal Tax Lien – if the IRS has filed a notice of federal tax lien, and you have already had or missed your legally-required tax Collection Due Process hearing, or
- Official Tax Levy – if the IRS has issued an official tax levy against you.
There is a chance that you may still be able to get a passport if one or more of the following circumstances apply to you:
- You have negotiated an IRS installment payment agreement and are making payments as required.
- You have completely settled your IRS debt through an offer in compromise, or a settlement agreement with the U.S. Department of Justice.
- You have requested a Collection Due Process hearing and the IRS has notified you of a levy or lien.
- The IRS has suspended the collection levy against you, and you have requested “Innocent Spouse Relief.”
Fixing America’s Surface Transportation (FAST)
These regulations on passports and taxes are part of the Fixing America’s Surface Transportation (FAST) Act, enacted in 2015 to provide dependable, long-term funding for surface transportation infrastructure planning and investment.
Passport Revocation
Unfortunately, you could find yourself in a dispute with the IRS or another revenue agency that carries severe consequences due to a series of events or circumstances. Unfortunately, when taxpayers fall behind, the IRS now has the power to go after individuals’ passports if they have what the IRS calls “seriously delinquent tax debt.”
Joshua Wilson, CPA – Certified QuickBooks ProAdvisor
Joshua Wilson, CPA, is a Certified QuickBooks ProAdvisor. A Certified QuickBooks ProAdvisor is a certified independent accounting pro who can provide strategic insights to drive small business success.
QuickBooks is a valuable tool to help you manage your small business. Let us help you maximize your abilities to use QuickBooks properly in your office.
Joshua Wilson, CPA, PC, is a full-service public accounting firm that specializes in accounting, tax preparation, tax planning, & business development for small businesses in Winder, GA, and the surrounding areas. Give Joshua a call today to set up a consultation at 770-856-1309 or email him at josh@joshuawilsoncpa.com.