The Internal Revenue Service (IRS) has issued a reminder to taxpayers with significant tax debts: reach out now to avoid losing your passport.
On December 4, 2015, the Fixing America’s Surface Transportation Act, or “FAST Act,” became law. Under the FAST Act, the State Department can yank passports from delinquent taxpayers after notification from the IRS that there’s a seriously delinquent tax debt. A “seriously delinquent” tax debt is defined as “an unpaid, legally enforceable federal tax liability” greater than $50,000, including interest and penalties. The limit is adjusted each year for inflation and cost of living: for 2019, it’s $52,000.
There are some exceptions under the law. The IRS isn’t supposed to report tax debt which is being paid on time as part of an installment agreement or under an Offer In Compromise. The law also snares any tax debt for which a Collection Due Process hearing has been requested timely in connection with a levy or a debt where the collection has been suspended due to an innocent spouse claim.
If you don’t meet any of the exceptions, the law requires the IRS to advise the State Department about taxpayers who meet the threshold. The law also requires the IRS to notify you in writing at the time that it certifies the debt to the State Department. The IRS does this by sending a Notice CP508C. The notice explains what you need to do to resolve the debt.
The IRS will also send you a Letter 6152, Notice of Intent to Request U.S. Department of State Revoke Your Passport, to give you another opportunity to resolve your debt. You must call the IRS within 30 days from the date of the letter. The IRS will typically not recommend revoking a taxpayer’s passport if the taxpayer is making a good-faith attempt to resolve the matter.
Once the IRS notifies the State Department, it will then hold your passport application or renewal for 90 days to allow you to resolve any errors, make full payment, or enter into a satisfactory payment plan. There is no grace period for resolving your debt before the State Department revokes an existing passport.
The IRS may also ask the State Department to exercise authority to revoke a passport. For example, the IRS may recommend that the State Department take action if the IRS had reversed a taxpayer’s certification because of a promise to pay, and the taxpayer failed to pay. Similarly, if a taxpayer could have used offshore assets to pay the debt – and chose not to – the IRS may also ask the State Department to revoke the taxpayer’s passport.
If you’re on the revocation list and you have imminent travel plans, you’ll want to call the IRS promptly. The IRS can generally shorten the processing time by 14 to 21 days if you qualify for expedited treatment. You’ll need to inform the IRS that you have travel scheduled within 45 days or you live abroad. You’ll need to provide the following documents to the IRS:
- Proof of travel, like an airline or cruise ticket, hotel reservation, or other document showing your destination and approximate date of travel.
- A copy of a letter from the Department of State denying your passport application or revoking your passport.
To get off the list, you must prove that the debt is fully satisfied, is legally unenforceable or is not seriously delinquent tax debt under the statute (in case you’re wondering, that does not include debt that dips below $50,000 – once you’ve hit that threshold, you must either pay it down or meet one of the other criteria).
For more on denying, revoking passports because of tax debt visit IRS.gov.