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Travel is a fundamental aspect of modern life—whether for leisure, business or any personal reason. However, certain situations can jeopardize your ability to travel internationally, with one such scenario being unresolved tax debt. Many individuals may be unaware that owing taxes to the IRS can result in the revocation or denial of their passports. To that end, understanding the relationship between tax debts and passport privileges becomes of paramount importance for those with international travel needs.
The IRS is authorized by law to share information regarding severely delinquent tax debts with the U.S. Department of State to enforce the revocation or denial of passports. In this blog post, we aim to help you comprehend the repercussions of unpaid taxes on your passport status and elucidate the process followed by the IRS and the U.S. Department of State in this regard. Furthermore, to ensure that your passport remains intact, we will discuss the role of a tax law firm in helping you address and resolve your tax debts.
In this comprehensive guide, we will provide insights into the connection between tax debts and passport status, the IRS’s process and enforcement criteria, and the ways in which a professional tax law firm is equipped to help safeguard your rights and freedoms. So read on to empower yourself with pertinent knowledge, paving the way to international travel and a debt-free future.
Tax Debts and Passport Status: Understanding the Connection
Owing taxes to the IRS can have far-reaching consequences beyond financial penalties and interest charges – it can directly impact your ability to travel abroad. The Fixing America’s Surface Transportation (FAST) Act, which was enacted in December 2015, mandates the IRS to notify the U.S. Department of State of individuals with “seriously delinquent tax debt”. Once notified, the Department of State has the authority to deny, revoke, or limit individuals’ passports, curtailing their international mobility.
‘Seriously delinquent tax debt’ refers to an unpaid and legally enforceable federal tax liability, including penalties and interest, assessed to be over $50,000, with the taxpayer not engaged in a repayment plan or appealing the tax debt. It is crucial to be aware of your tax debt situation to avoid unexpected disruptions to your travel plans due to passport revocations or denials.
IRS Process and Enforcement Criteria for Passport Revocation
While the prospect of losing your passport due to tax debts may be daunting, understanding the IRS’s criteria and process for passport enforcement can help you work towards resolving your tax issues proactively. The IRS follows specific steps and guidelines when dealing with passport revocation:
- Notification: The IRS sends a Notice of Federal Tax Lien or Notice of Levy to the taxpayer, informing them of their seriously delinquent tax debt.
- Referral: If the taxpayer does not address their tax debt or establish a payment arrangement, the IRS shares the taxpayer’s information with the U.S. Department of State, recommending passport enforcement.
- Enforcement: The Department of State then takes necessary action, which may include denying passport applications, revoking existing passports, or limiting the duration and use of current passports.
- Reinstatement: Once the tax debt issues are resolved, the Department of State lifts the passport restrictions, allowing the taxpayer to regain their full passport privileges.
By familiarizing yourself with the IRS’s process and understanding the criteria for passport enforcement, you can avoid potential surprises and take appropriate steps to maintain your passport status.
Exceptions and Relief Options for Tax Debts
While the prospect of losing your passport due to tax debts can be disconcerting, various exceptions and relief options are available to mitigate these concerns. Taxpayers in the following circumstances may be exempt from passport enforcement:
- Innocent Spouse Relief: If your spouse is responsible for the tax debts and you were unaware of their actions, you can apply for Innocent Spouse Relief, which separates your tax liabilities.
- Bankruptcy: If you are in active bankruptcy proceedings, the IRS typically does not refer your case to the Department of State for passport enforcement.
- Offer in Compromise: If you have a pending or accepted Offer in Compromise with the IRS to settle your tax debt, your passport status remains unaffected.
- Currently Non-Collectible Status: If you are facing financial hardship, the IRS may deem your account as “currently non-collectible” and temporarily halt passport enforcement.
Understanding the exceptions and relief options available can help you explore ways to prevent adverse passport consequences and maintain your international mobility.
How a Tax Law Firm Can Help Safeguard Your Passport Privileges
Navigating the complexities of tax debts and passport issues can be overwhelming. Here’s where a tax law firm can provide invaluable support and assistance, offering the following advantages:
- Expertise: A tax attorney has comprehensive knowledge of tax laws, IRS procedures, and relief options, allowing them to provide tailored advice and guidance based on your unique situation.
- Representation: A tax attorney can represent you in negotiations with the IRS and the Department of State, advocating for your rights and working to secure a favorable outcome.
- Devising Strategies: With a thorough understanding of tax laws and IRS processes, tax attorneys can develop targeted strategies to resolve your tax debts, protect your passport privileges, and prevent future tax issues.
- Peace of Mind: Entrusting your tax debt and passport concerns to a tax law firm means you can rest assured that your situation is being handled by knowledgeable professionals, allowing you to focus on other aspects of your life.
The interplay between tax debts and passport status is often underappreciated, and yet, the ramifications can be significant for individuals reliant on international travel. By understanding the connection between tax debts and passport enforcement, exploring the available exceptions and relief options, and partnering with a tax law firm, you can work towards resolving your tax issues and safeguarding your passport privileges.
Don’t let tax debts disrupt your international mobility. Contact our skilled tax attorneys at Segal, Cohen & Landis for a free consultation to devise a strategy tailored to your unique situation and reclaim your passport freedoms.