IRS Debt and Your Passport

As we wrote in our February, 2016, newsletter, a new passport-related law was quietly added to the “FAST” Act (Fixing America’s Surface Transportation Act) signed by President Obama on December 4, 2015. This law gives the IRS a powerful tool in collecting taxes by controlling the issuance, renewal and revocation of your passport.

The IRS recently posted an update on its website. The taxing authority has officially given notice that their action may start any time now:
“The IRS has not yet started certifying tax debt to the State Department. Certifications to the State Department will begin in early 2017…”
And, now that we are in January 2017, how should we interpret this posting?

While it has taken some time for the IRS and the State Department to figure out how the passport revocation process will work, the process will certainly start sometime soon.

Here is how the process works. Under the new Code Section 7345, the IRS is authorized to certify a “seriously delinquent” tax debt to the State Department. After receiving certification from the IRS, the State Department generally will not issue or renew a passport to the delinquent taxpayer. If the taxpayer already has a passport, the State Department may revoke it. Taxpayers will be provided various notices as the process moves forward, so they will be given an opportunity to resolve their tax balances.

Do you fall into the category of having “seriously delinquent tax debt?” If you have unpaid federal tax debt totaling more than $50,000 (including interest and penalties), then you are in the category and may be subject to this passport action.

If you or anyone you know is in the “seriously delinquent” category, now is the time to resolve the issue before the IRS starts certifying the debt to the State Department. Contact the Sodowsky Law Firm at 703.968.8000 to schedule a confidential consultation to discuss options for dealing with the problem.