On January 1, 2016, a new law went into effect that may put the passports of thousands, possibly tens of thousands, of U.S. taxpayers in jeopardy. A provision was quietly added to the Fixing America’s Surface Transportation Act (FAST Act), signed by President Obama on December 4, 2015, to give the IRS more leverage in collecting seriously delinquent taxes.
How can a law affecting collection of taxes be a part of a bill addressing transportation issues? Well, that is the U.S. Congress at work – compromising wherever necessary to get various issues addressed.
What Will Happen if You Have Seriously Delinquent Taxes?
If you are “seriously delinquent” in your payment of taxes to the U.S. government, your passport may be revoked, or you may be denied a new passport or renewal of an existing passport. “Seriously delinquent” tax debt means
- the taxpayer owes more than $50,000 (including penalties and interest),
- a notice of federal tax lien has been filed by the IRS, and
- the taxpayer does not have some resolution in place or pending.
All the administrative processes and procedures may not yet be worked out. We do know that the Commissioner of the Internal Revenue Service must certify to the Secretary of the Treasury that a taxpayer is seriously delinquent. Then, the Secretary of the Treasury reports this information to the Secretary of State, who handles the passport matter. Upon receiving such certification, the Secretary of State “shall not issue a passport” to such individual. Additionally, Secretary of State may revoke any passport previously issued to such an individual.
What Kind of Notices Will Taxpayers Receive?
We also know the taxpayer will be provided various notices as the process moves forward.
First, this new possible collection procedure must be included in the notices the IRS sends to the taxpayer of IRS’s potential actions of filing liens or doing levies.
Then, the taxpayer must receive a notice when the Commissioner of the IRS sends a certification to the Secretary of the Treasury that the taxpayer is seriously delinquent in payment of his taxes.
While anyone who owes money for delinquent taxes should be opening and reading every notice from the IRS, this new law makes it even more critical for the taxpayer to read the notices. The taxpayer who misses a deadline may be at greater risk regarding loss of passport privileges.
Contact Us Today
If you or anyone you know may be in the “seriously delinquent” category, contact the Sodowsky Law office at 703.968.8000 to schedule a consultation to discuss options for dealing with the problem.
