Amid the hoopla surrounding President Trump’s executive orders limiting travel to the United States, the Internal Revenue Service and the State Department have quietly taken steps to implement another less-covered travel ban.
Once the program is implemented, the Internal Revenue Service will certify seriously delinquent tax debts to the State Department, which is responsible for issuing and renewing passports. Generally, the Department will not issue or renew a passport after receiving the certification from the IRS. Further, the Department may revoke passports previously issued. Basically, that means beginning sometime in 2017, if you owe taxes, don’t plan to leave the country.
The IRS has not specified when, exactly, the program will be implemented. Rather, the IRS website simply states, “[t]he IRS has not yet started certifying tax debt to the State Department. Certifications to the State Department will begin in early 2017, and this webpage will be updated to indicate when this process has been implemented.”
So, what makes a tax debt “seriously delinquent” as opposed to “delinquent” or, as our current administration might say, “bigly delinquent”? A few things; it must be an unpaid federal tax debt, which i) totals more than $50,000 (including penalty and interest), and ii) for which a notice of federal tax lien has been filed and all administrative remedies have lapsed or been exhausted, or a levy has been issued.
This being a tax law, there are, of course, several exceptions. Tax debt that is not “seriously delinquent” even though it meets the above criteria includes:
debt being paid in a timely manner under an IRS installment agreement, an accepted offer in compromise, or a settlement agreement with the Justice Department;
debt for which a collection due process hearing is timely requested in connection with a levy to collect the debt; and
debt for which collection has been suspended because a request for innocent spouse relief under IRC §6015 has been made.
If the IRS certifies your seriously delinquent tax debt to the State Department, you will receive a Notice CP 508C by regular mail. At that point, you should take steps to reverse the certification. In most cases, this can be done by establishing an installment agreement with the IRS to pay the debt over time or upon the IRS’s acceptance of an offer in compromise to satisfy the debt.
If you owe taxes to the IRS and need help, call the tax attorneys at Mosebach, Funt, Dayton & Duckworth, P.C. We would be happy to negotiate a tax debt settlement on your behalf.