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Taxpayers with significant tax debt should act quickly to protect their passports

posted Sep 7, 2019, 5:12 PM by Zaher Fallahi

Source: IRS Number  IR-2019-141 ( modified by Zaher Fallahi, Esq., CPA)

The IRS has urged taxpayers to resolve their significant tax debts to avoid putting their passports in jeopardy. They should contact the IRS now to avoid delays in their travel plans later. Under the Fixing America’s Surface Transportation (FAST) Act, the IRS notifies the State Department (State) of taxpayers certified as owing a seriously delinquent tax debt (SDTD), currently $52,000 or more. The law then requires State to deny their passport application or renewal. If a taxpayer currently has a valid passport, State may revoke the passport or limit a taxpayer’s ability to travel outside the United States.

When the IRS certifies a taxpayer to State as owing a SDTD, the taxpayer receives a Notice CP508C from the IRS. The notice explains what steps the taxpayer needs to take to resolve the debt. IRS telephone assistors can help taxpayers resolve the debt. For example, they can help taxpayers set up a payment plan or make them aware of other payment options. Taxpayers should not delay because some resolutions take longer than others.

Don’t Delay!
It’s especially important for taxpayers with imminent travel plans who have had their passport applications denied by State to call the IRS promptly.

For expedited treatment, taxpayers must provide the following documents to the IRS: 

1- Proof of travel. This can be a flight itinerary, hotel reservation, cruise ticket, international car insurance or other document showing location and approximate date of travel or time-sensitive need for a passport.

2- Copy of letter from State denying their passport application or revoking their passport. State has sole authority to issue, limit, deny or revoke a passport.

Before contacting State about revoking a taxpayer’s passport, the IRS will send Letter 6152, Notice of Intent to Request U.S. Department of State Revoke Your Passport, to the taxpayer to let them know what the IRS intends to do and give them another opportunity to resolve their debts . Taxpayers must call the IRS within 30 days from the date of the letter. Generally, the IRS will not recommend revoking a taxpayer’s passport if the taxpayer is making a good-faith attempt to resolve their tax debts.

Ways to Resolve Tax Issues 
There are several ways taxpayers can avoid having the IRS notify State of their seriously delinquent tax debt. They include the following:

1- Paying the tax debt in full,

2- Paying the tax debt timely under an approved installment agreement,

3- Paying the tax debt timely under an accepted offer in compromise,

4- Paying the tax debt timely under the terms of a settlement agreement with the Department of Justice,

5- Having a pending collection due process appeal with a levy, or

6-Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief. 

Relief programs for unpaid taxes
frequently, taxpayers qualify for one of several relief programs including the following:

1- Payment agreement. Taxpayers can ask for a payment plan with the IRS by filing Form 9465. Taxpayers can download this form from IRS.gov and mail it along with a tax return, bill or notice. Taxpayers who are eligible can use the Online Payment Agreement system to set up a monthly payment agreement. Using the IRS online payments plan system is cheaper and can save time.

2- Offer in compromise. Some taxpayers may qualify for an offer in compromise, 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 tool to help them determine whether they’re eligible for an offer in compromise. For more on denying, revoking passports because of tax debt visit IRS.gov

Note, Emphasis added by Zaher Fallahi, Esq., CPA

Zaher Fallahi, Tax Defense Attorney, CPA, licensed in California and Washington D. C., Tax Defense Attorney assists taxpayers with delinquent tax debts, foreign gifts, and tax problem resolutions nationwide. Tel.: (310) 719-1040, (714) 546-4272 and (877) 687-7558 toll free nationwide, E-mail   taxattorney@zfcpa.com

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