24 May A LARGE UNPAID TAX BILL COULD PUT YOUR PASSPORT AT RISK
Most Americans aren’t using their passports right now. But it’s still important to remember that, if the IRS certifies that you have a seriously delinquent tax debt (SDTD), your passport application could be denied, or your current passport could be limited or revoked.
You have an SDTD if 1) you owe more than $53,000 (as indexed for inflation) in back taxes, penalties and interest, 2) the IRS has filed a Notice of Federal Tax Lien, and 3) the period to challenge the lien has expired or the IRS has issued a levy.
Should you find yourself in this situation, there are several steps to take to avoid losing your passport. First, obviously, you can pay your tax debt in full immediately. If that’s not possible, you may be able to pay your debt on a timely basis according to an approved installment agreement, accepted offer in compromise or settlement agreement with the Justice Department.
Requesting a collection due process hearing regarding a levy, or having collection suspended through a request for innocent spouse relief, may also enable you to retain your passport. More important, the IRS won’t likely notify the U.S. State Department of an SDTD during a federally declared disaster, such as the one we’ve experienced this year, or in the case of bankruptcy, identity theft or other hardships. Contact us for more info.
If any topics covered in this newsletter raise questions or if there are other accounting or tax matters on your mind, Gates Kirby & Company is always happy to provide guidance tailored to your unique situation. Our team genuinely enjoys helping clients navigate these topics with confidence. We look forward to connecting with you soon.
- Gates, Kirby & Company.
Tax laws, regulations, and interpretations can change without notice. Due to changing tax laws the content may be considered historical. Newsletter articles provide no guarantee information are complete, accurate, or current. Readers should verify applicable rules by consulting official sources (e.g., IRS, Colorado Department of Revenue) and/or consult with Gates Kirby to review how the content in the article content may be applicable to your tax situation.