If you plan on traveling internationally, whether for business or for pleasure, you should be aware of a new law that allows the IRS to revoke your passport if you owe taxes.
For many years, the State Department has been able to prevent individuals from traveling with a passport if they owe certain types of debt, such as child support. In 2012, the US Government Accountability Office (GAO) issued a report to Congress proposing that the same mechanism be implemented for individuals who owe taxes.
In 2015, Congress gave the IRS and State Department authority to do just that. This law applies to individuals with “seriously delinquent tax debt.” Last year, the IRS began implementing the new law, and many taxpayers have been receiving notices (CP508C) from the IRS saying that their tax debt has been certified to the State Department as being seriously delinquent.
Who is at risk?
The provision applies to individuals with “seriously delinquent tax debt.” These are people who owe more than $50,000 in federal taxes, if at least one of the following actions has already occurred:
- The IRS has filed a Notice of Federal Tax Lien; or
- The IRS has previously issued a levy.
The $50,000 threshold includes interest and penalties, and it is adjusted annually for inflation ($52,000 in 2019).
What does a Notice CP508C mean?
If you receive a CP508C from the IRS, it means they have notified the State Department that you owe seriously delinquent tax debt. Once the State Department receives this certification from the IRS, they generally will not renew your passport or issue a new passport to you.
What if I already have an active passport?
If you already have an active passport, the State Department could revoke it. If they do, they must notify you in writing.
If I can’t pay what I owe, how do I avoid getting my passport revoked?
If you enter into a payment arrangement with the IRS, such as an installment agreement, then your tax debt will no longer be considered seriously delinquent. Likewise, if the IRS accepts an Offer in Compromise (settlement), then your debt will no longer be considered seriously delinquent. If you lack the financial ability to make payment arrangements with the IRS, then you may be eligible for “Currently Not Collectible” status, which also prevents your debt from being considered seriously delinquent.
If the IRS has certified my debt as seriously delinquent to the State Department, how do I get that reversed?
When the IRS reverses a certification to the State Department, they issue a Notice CP508R. This will be issued within 30 days of the debt no longer being considered seriously delinquent.
What happens if my passport is revoked while I am outside the country?
If the State Department decides to revoke your passport while you are outside the country, you will still be able to return to the US, but your passport will be limited only for return travel to the US.
If you have received a Notice CP508C, or if you are at risk of receiving one in the future, or need help with other IRS issues, contact Naveid Jahansouz at 972-818-5300 or fill in the contact form below.
Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.