Can you get a passport if you owe taxes? It may seem like a strange question, as the relationship between taxes and passports might not seem obvious at first glance, but for those who have severe tax debt, it can become a pressing concern.
Understanding how taxes and passport eligibility are connected is crucial for anyone who loves to travel or has international plans on the horizon.
In this blog, we will delve into the intricate web of tax debt, passport eligibility, and how tax professionals can navigate this complex landscape.
The IRS and Passport Eligibility
Before we dive into the details, it’s important to recognize the IRS’s role in matters related to passports. While passport issuance falls under the jurisdiction of the State Department, the IRS has the power to influence this process, particularly when it comes to individuals with overdue taxes. One critical indicator of this influence is “seriously delinquent tax debt.”
Seriously Delinquent Tax Debt Defined: Seriously delinquent tax debt refers to the point where your debts from income taxes have reached a critical level. If you owe the IRS more than $59,000 in total, encompassing back taxes, penalties, and interest (please note that this figure is adjusted annually for inflation), your debt is classified as “seriously delinquent.”
IRS Certification to State Department: When your tax debt reaches this critical threshold, the IRS has the authority to certify your debt to the State Department. This certification can have significant implications for your passport status, potentially preventing the issuance of a new passport or passport renewal, revoking an existing one, or even limiting you to a special-use passport that allows only a return to the USA.
Qualifications for Seriously Delinquent Tax Debts
Understanding the qualifications for seriously delinquent tax debt is crucial, as these criteria determine whether your tax debt will trigger passport-related issues.
Criteria for Seriously Delinquent Tax Debt:
- Owing $59,000 or More: Your total tax debt must exceed $59,000, including unpaid taxes, penalties, and interest (2023 figure, adjusted annually).
- Federal Tax Lien: The IRS must have filed a notice of federal tax lien, and you must have either participated in a Collection Due Process hearing or missed the deadline for such a hearing.
- IRS Levy Issued: The IRS must have issued a levy against you.
If your debt meets these qualifications, the IRS will send you a CP508C notice informing you of your seriously delinquent tax debt status. However, there are instances where taxpayers may be unaware of this status until they apply for a passport.
Exemptions and Avoiding Passport Issues
Not all individuals facing tax debt will automatically face passport restrictions. The IRS considers various situations and exemptions that might allow you to obtain or renew your passport despite your tax debt.
Common Exemptions Include:
- Installment Agreements: If you are paying off your debt through an approved installment agreement payment plan or have requested an offer in compromise, your passport eligibility might not be affected.
- Innocent Spouse Relief: Innocent spouse relief is a tax provision that allows a spouse to be relieved of joint tax liabilities if they can demonstrate that their partner was solely responsible for errors or omissions on a jointly filed tax return. Applying for innocent spouse relief can also exempt you from passport-related issues.
- Collection Due Process Hearing: A Collection Due Process (CDP) hearing is a formal IRS proceeding that allows taxpayers to appeal and address tax collection actions, such as liens and levies, before they are enforced. If you have timely requested a Collection Due Process hearing, it may enable you to obtain a passport.
It’s crucial to maintain good standing in payment plans to avoid passport issues, as falling behind on payments could still lead to passport revocation.
Resolving Delinquent Tax Debts to Secure Passport
When facing the prospect of passport restrictions due to tax debt, taking prompt and effective action is crucial. Seeking tax consulting services can be a game-changer in resolving your tax debt and ensuring passport eligibility. Here are the steps to consider:
- Evaluate Tax Debt Relief Options:
Begin by exploring the various tax debt relief options available. These include:
- Offer in Compromise (OIC): This program allows you to settle your tax debt for less than the full amount if you meet specific criteria.
- Installment Agreements: Setting up a monthly payment plan with the IRS can help you pay off your debt over time.
- IRS Tax Resolution Services: TPI Group offers IRS tax resolution services, providing expertise and support for individuals facing IRS issues or audits. Our team of professionals represents clients throughout the IRS process, aiming for a swift and efficient resolution.
- Address Your Tax Debt: Take proactive steps to address your tax debt promptly. Ignoring it will only exacerbate the situation and may lead to further passport-related issues.
- Maintain Good Standing: If you opt for an installment agreement or OIC, it’s essential to adhere to the terms diligently. Falling behind on payments may still result in passport revocation.
By resolving your tax debt with the assistance of tax professionals and exploring available relief programs, you can secure your financial future and passport eligibility simultaneously. Don’t let tax debt hinder your travel plans; take the necessary steps to resolve it.
TPI Group – Helping You Keep Your Taxes in Order
Understanding the connection between taxes and passport eligibility is vital for anyone with international travel plans. The IRS’s ability to influence passport issuance through seriously delinquent tax debt highlights the importance of addressing tax debt promptly.
Avoiding and navigating tax-related challenges requires professional guidance, and seeking TPI Group’s tax preparation services can be the key to managing your taxes effectively.
Don’t let tax debt stand in the way of your travel plans; take proactive steps with TPI Group today.