President Donald Trump’s recent executive order, a travel ban, has stirred much controversy, sadness, and even anger. Recently, however, a new travel ban has been issued. This one, might not be too highly favored either. Simply put, if you don’t pay your taxes your passport will be denied or revoked.
The IRS was given leeway by congress nearly a year ago to do this through tax code Section 7345 which is labeled “Revocation or Denial of Passport in Case of Certain Tax Delinquencies.” The law was rejected at least once before in 2012 than in 2015, when Congress finally passed it, President Obama approved it.
The uses of this tax law isn’t just in case of criminal circumstances or even if there’s suspicion of fleeing the country. Basically, this is the IRS’s way of using the threat of limited travel to collect taxes from citizens.
A year after its approval by President Obama, the IRS disclosed details on the law on its website. The IRS will alert the State Department of anyone with delinquent taxes. The State Department in turn will revoke or deny a passport. Usually the State Department won’t approve a passport after receiving a certification from the IRS anyway.
The whole process has yet to begun. Now everyone is waiting to see how the IRS and State Department will begin the enforcement of this law. The IRS says that they won’t begin until sometime mid-2017 and people can stay posted for the exact date on their website.
As of now, this is current information for the IRS pertaining to what awaits those who have delinquent tax debt.
Seriously delinquent tax is when someone has more than $50,000 in tax debt. This includes any interest and penalties that were acquired. As a result, a federal tax lien or a levy will be issued.
The following are instances where tax debt isn’t big enough to be considered “serious” but isn’t taken lightly in any sense:
- Debt being paid in a timely manner under an installment with the IRS.
- Debt being paid in a manner accepted in a compromise with the IRS or a settlement entered into with the Department of Justice.
- A collection due process hearing has been requested for the collection of a debt or levy.
- When collection has been suspended because a request for innocent spouse relief under IRC Section 6015 has been made.
Yet before the State Department can deny a passport, the passport application that has been filed will be held for at least 90 days. This is so you get time to resolve any certification error or issues, make a full payment on any delinquent tax debt, and/or be entered into a satisfactory payment agreement with the IRS.
It’s also a fact that there is no grace period for any debt to be resolved before the State Department rescinds a passport. However, the IRS is required to notify anyone in writing if it certifies any debt it considers seriously delinquent to the State Department. The IRS has to notify anyone in writing when it decides to reverse any of the certifications. These letters will be sent to the consumers last known address.
A certification will be reversed for a few reasons. Usually the IRS alerts the State Department of a reversal when:
- Tax debt has been fully satisfied or becomes legally unenforceable
- The debt is no longer considered seriously delinquent
- The certification is erroneous
Which if the certification is found to be erroneous, the IRS will send out a notification as soon as it can within. If the debt is satisfied, the IRS will send notice within thirty days. There are also cases when the IRS wont reverse the certification. For example, when a taxpayer makes a collection request during innocent spouse relief on debt that isn’t connected to the certification. Another time the IRS won’t take back the certification is when the debt is below $50,000.
However, if the IRS sent a certification of a taxpayer’s debt to the State Department, that taxpayer can file a suit with a U.S. Tax Court of a District Court to have the court decide if the certification was an error or the IRS didn’t reverse the decision when it was supposed to.
And if a taxpayer isn’t capable of satisfying the full debt amount owed, there’s the possibility making different arrangements in the form of installments payed to the IRS. These payment plans can help keep a U.S. passport as a form of compromise with the IRS. If there is any reason that allows for a taxpayer to completely disagree with the accusations, they have the option to contact the phone number on Notice CP 508C. However, if there was an expectation of a tax refund once taxes are filed, the IRS will put that money toward the debt.
As far as passports are concerned, to see if a passport has indeed been cancelled or rescinded its best to contact the State Department’s National Passport Information Center at 877-487-2778. There are cases where a passport is needed in order to retain a job. If that is the case and you have seriously delinquent debt its best to pay the amount in full, it’s a must, or make payment arrangements with the IRS.
If at any point after the enforcement of the law you find that your passport has been rescinded or denied, the IRS says it is a must that the debt you owe be paid in full. There are payment arrangement and often times when the certifications are simply error. Once the debt has been settled or the IRS alerts the State Department that the certification was erroneous