Tax Tip: Delinquent Tax Debts & Passport Denials

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Dickinson Wright

The IRS is actively working with the State Department to deny passport applications and revoke existing passports of taxpayers with delinquent tax debts of $52,000 or more. In December 2015, Congress gave the IRS the authority to certify tax debt to the State Department, thereby listing individuals as ineligible for passports. The IRS began certifying individuals as ineligible for passports in 2018 and is continuing to certify additional taxpayers each month. While the IRS is required to notify individuals of this certification, these notifications are frequently only a couple of sentences buried within other IRS correspondence and are easily missed by taxpayers. Many taxpayers are unaware they have been certified until they apply for a passport and receive a denial letter. The IRS is required to make limited exceptions for certain taxpayers – namely, those in bankruptcy proceedings; currently making payments under an installment agreement, offer in compromise, or other settlement with the IRS; residing in a federally declared disaster area; or serving in a designated combat zone, but taxpayers in such situations should not assume the IRS cross-checking measures for such exceptions are infallible. Taxpayers with delinquent taxes and family members working, studying, volunteering, or otherwise living overseas are encouraged to resolve tax issues early on, to avoid certification issues delaying travel in the event of an emergency. While the IRS is also required to make exceptions for humanitarian or emergency travel, because passport certification is a relatively new authority granted to the IRS, administrative procedures are still being worked out, creating greater potential for error and delay in such cases.

Don’t let your summer travel plans get derailed by the IRS! Experienced tax attorneys can help resolve these issues, even with only weeks to go before your travel plans (although the further out from departure date the better to ensure no delays).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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