A new law will soon go into effect that will revoke the passports of taxpayers who owe a significant amount of back taxes. This law was passed in 2015 as a tax collection tool for the Internal Revenue Service (IRS).
Details of the Law
The law allows the IRS to certify your tax debt to the State Department—the agency that issues passports. Once a tax debt is certified, the State Department will revoke passports or prevent passports from being issued to the tax debtor. The IRS has not yet begun certifying tax debt and has not announced the exact date this process will begin; however, the IRS did indicate that the first certifications could come in early 2017.
Who Will Be Affected by This Law?
The new law will apply to individuals with seriously delinquent tax debt. The law defines this type of debt as federal tax debt of more than $50,000, including interest and penalties indexed for inflation.
The debt must be legally enforceable and unpaid. Notice of the tax lien must have been filed, and all administrative remedies under Code Sec. 6320 must have expired or been pursued, or a levy must have been issued.
When is Tax Debt Not Seriously Delinquent?
Not all tax debt is considered seriously delinquent, which means that the new law will not apply to such tax debtors. This law will not apply to tax debt:
- Being paid on time through a payment plan agreement with the IRS;
- Being paid on time through an offer in compromise approved by the IRS or a settlement agreement that the Justice Department has approved;
- Where there is a levy to collect the debt and a collection due process hearing has been requested; or
- Where an application for innocent spouse relief has been made pursuant to Code Sec. 6015 and collection has been suspended.
Contact a Santa Clara County Tax Attorney
If you are concerned that your passport will be revoked or that your passport application will be denied, there are options to remedy the situation.
If your tax debt qualifies for certification to the State Department, you will be notified. The State Department will hold the certification for 90 days, which allows you time to address your debt.
A skilled tax law attorney can help you avoid losing your passport because of seriously delinquent tax debt and can help you resolve any other tax issues you may be facing. Call a skilled San Jose tax law attorney at John D. Teter Law Offices at 408-866-1810 to set up your initial consultation.