It doesn’t matter if you consider yourself a regular jetsetter or are just in the beginning stages of planning your first trip outside of the country EVER; beginning this year, if you have “seriously delinquent tax debt” the IRS will be looking to you to pay your back taxes completely or enter into a payment agreement. Otherwise, the status of your passport could be in jeopardy.
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The Fixing America’s Surface Transportation (FAST) Act was signed into law in December 2015. From this legislation stemmed provisions that allow the IRS to revoke or deny passports in the event of serious delinquent tax debt. According to the agency’s website, the State Department will not issue a passport if it has received certification indicating your tax status from the IRS.
Certifications to the State Department, according to the IRS, began in January 2018.
The IRS recently came out with guidelines to help you determine whether or not you should put your travel plans on hold. Generally speaking, individuals who owe more than $51,000 in back taxes and have had a Federal Tax Lien filed without a challenge will be grounded until plans have been made to settle this debt.
Luckily, there are several ways to avoid the IRS’ very own do not fly list.
4 Ways To Keep The IRS Away From Your Passport
- Paying your tax debt in full.
- Paying your tax debt under an approved installment plan in a timely manner.
- Paying your tax debt under an accepted offer in compromise.
- Paying your tax debt following the terms of a settlement agreement with the Department of Justice.
Additionally, your passport is also safe if one or more of the following situations apply to you.
- Are in bankruptcy.
- Are a victim of tax-related identity theft.
- Have an account identified by the IRS is considered not collectible due to hardship.
- Reside inside a declared federal disaster area.
- Have a pending request with the IRS for an installment plan or offer in compromise.
- Have contacted the IRS and the agency has accepted an adjustment that will pay your debt in full.
If you have any further questions about the FAST Act and what the IRS can and cannot do with your passport, email Rea & Associates or check out the IRS website for answers.
By Maribeth Wright, CPA (Retired)