Man holding a passport standing in an airport
While hiding one’s head in the sand can feel better than actually dealing with the problem of tax debt after an IRS Audit, it needs to be dealt with sooner rather than later. Especially if a taxpayer has plans to travel, needs to travel for work, or would like to be able to travel internationally at will. In this article, we'll discuss how a severe tax problem, unfiled tax returns, and mounting unpaid tax can lead to IRS passport revocation. 

What Qualifies as Seriously Delinquent Tax Debt?

Serious tax debt and delinquency can result in the Internal Revenue Service notifying the State Department to issue a passport revocation for your right to international travel. Under the Fixing America’s Surface Transportation (FAST) Act, by law, the IRS will notify the State Department (State) of taxpayers who have a tax debt of $52,000 or more. The IRS will also certify seriously delinquent unpaid tax debt to the State Department if notice of federal tax lien has been filed, all legal administrative remedies have been exhausted, and a levy has been issued. The law then requires the State to deny passport applications or renewal.  But before denying your passport application, the State Department will hold your application for 90 days, allowing you to remedy erroneous certification issues, make full payment of your tax debt, or enter a payment plan agreement with the IRS. For the first option, if the IRS certified your debt to the State Department, you have the option to file a suit in the U.S. Tax Court or a U.S. District Court. This allows the tax court to determine if the certification was erroneous or if the IRS failed to reverse it when told to do so. Also, if a taxpayer has a valid, current passport, the State may revoke the taxpayer's passport or limit their ability to travel outside the United States.

How Can I Avoid My Passport Being Revoked?

Fortunately, there are several ways taxpayers can avoid having the IRS notify the State of their seriously delinquent tax debt. They include the following:
  • Paying the tax debt in full
  • Paying the tax debt timely under an approved installment agreement
  • Paying the tax debt timely under an accepted offer in compromise
  • Paying the tax debt timely under the terms of a settlement agreement with the U.S Justice Department
  • Having a pending collection due process appeal with a levy
  • Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief 
    • Also, by getting the taxpayers to acknowledge the problem, they can get busy applying for (and likely qualifying for) one of several relief programs - including a payment agreement. The taxpayer can fill out Form 9465 at IRS.gov and mail it along with their tax return, bill, or IRS notice. If approved, the taxpayer can use the Online Payment Agreement system to set up a monthly payment agreement that saves time and money, not to mention one’s travel rights! Another option is applying for an Offer in Compromise, which is an agreement between a taxpayer and the IRS that settles the tax liability for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to determine the taxpayer’s ability to pay. Taxpayers can use the Offer in Compromise Pre-Qualifier tool to help them determine whether they’re eligible for an offer in compromise. It is important to find a solution rather than hide from tax debt. It won’t go away, and there will likely be potentially serious consequences. It’s important that taxpayers resolve their significant tax debt to avoid putting their passports in jeopardy. Anyone with a tax debt should contact the IRS as soon as possible to avoid delays in their travel plans. You can also contact our tax experts at 1-800Accountant to help you get back on track.

    This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. 1-800Accountant assumes no liability for actions taken in reliance upon the information contained herein.