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Can the IRS Stop You From Getting a Passport?

January 5, 2022
Weisberg Kainen Mark, PL

If you’ve got plans to travel abroad this year and haven’t applied for or renewed your passport, the Internal Revenue Service can throw a wrench in the works if you owe a significant amount of back taxes.

Three years ago, the IRS implemented harsher collection measures for people with “seriously delinquent” federal tax debt. This change, which applies to those who owe $54,000 or more, appeared as part of the Fixing America’s Surface Transportation (FAST) Act, and can result in revocation of your passport or denial of a new one.

What is a Seriously Delinquent Tax Debt?

Those who risk passport cancellation generally meet the following criteria:

  • They owe over $54,000 in federal tax arrears, penalties, and interest
  • The IRS has sent them a Notice of Federal Tax Lien and the deadline for challenging the lien has passed OR
  • A levy has been issued

The IRS has stated that it will not certify a taxpayer as seriously delinquent if they are:

  • In bankruptcy
  • A victim of tax-related identity theft
  • Experiencing hardship that makes their debt uncollectible
  • Located in a federally declared disaster area

Taxpayers serving in a combat zone will also not risk passport denial during their time of service.

What is the Process?

When the IRS certifies you to the State Department as a seriously delinquent taxpayer, they will also send you a Notice CP508C, which explains what you need to do to address the debt and resolve the situation. This notice is sent to your last known address.

The State Department will hold your application for 90 days before denying your passport application or renewal so you can pay the debt, work out a satisfactory payment arrangement with the IRS, or correct any erroneous information. If this deadline passes without a resolution, the State Department will notify you in writing that your passport application has been denied or your existing passport has been revoked. 

Once you pay the tax debt or negotiate a payment arrangement, the IRS will reverse your certification within 30 days. Should an urgent need to travel arise, the IRS can notify the State Department to remove your certification from your record more quickly.

How to Prevent Loss of Your Passport

There are several ways that you can avoid passport denial or cancellation due to tax debt delinquency. They include:

  • Paying the tax debt in full.
  • Proposing a payment plan. You can propose a short-term payment plan if you owe less than $100,000 in combined tax, penalties, and interest and can pay it within 120 days.
  • Proposing an installment agreement if you need more than 120 days to pay. You tell the IRS how much you can afford to pay each month, and it adds a fee to your debt if your plan is approved. 
  • An offer in compromise, which is when you offer to settle the debt for a lower amount. This relief is generally more difficult to qualify for and the IRS will only accept if it determines that it can collect more from you through an offer in compromise than it could through other means before the collection statute expires.
  • Requesting innocent spouse relief. If you believe that the tax debt was incurred because your spouse omitted or improperly reported items on your tax return, you can be relieved of responsibility for paying tax, interest, and penalties.

Appealing a Certification

If the IRS certified your tax debt to the State Department and you disagree with the decision, you can file suit in the U.S. Tax Court or a District Court. Upon finding that the certification is unjustified, the court can order the IRS to notify the State Department that it was erroneous.

Contact a Florida Tax Litigation Attorney

If you believe that you will soon be subject to a passport restriction because you owe money to the IRS, it is important to act quickly. Contact a Florida tax attorney who can advise you on the recommended solution for your tax situation. At Weisberg Kainen Mark, PL, we have helped many clients resolve their tax controversies with the IRS and will give your case the same dedicated attention. To schedule a consultation, call (305) 374-5544.

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Weisberg Kainen Mark, PL

As experienced trial lawyers with a passion for justice, our firm provides clients with compelling advocacy, attorney availability, and creative solutions to your tax or criminal law matters.

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