If you have a seriously delinquent tax debt, you run the risk of having your passport revoked or denied. The law authorizes the IRS to certify any seriously delinquent tax debt to the State Department, and the State Department can then deny your passport application or revoke your current passport. For individuals outside the country, the State Department can issue a limited validity passport to allow them a direct return to the US.
What Tax Debt Does the IRS “Certify”? What’s Excluded?
A seriously delinquent tax debt refers to an individual’s unpaid, legally enforceable federal tax debt totaling more than $54,000 (adjusted each year for inflation), including interest and penalties. However, the IRS will only certify the tax debt after a notice of federal tax lien is filed and all administrative remedies outlined under IRC 6320 have either lapsed, have been exhausted, or a levy has been issued. There are some tax debts that may not be certified as seriously delinquent tax debt. These debts include:
- Tax debt related to child support.
- Foreign Bank and Financial Account (FBAR) penalty.
- Tax debt paid on time as per an IRS appointed agreement.
- Tax debt paid in a timely manner as per an Offer in Compromise accepted by the IRS or settlement entered with the Justice Department.
- Tax debt for which collection has been suspended due to submission of a request for innocent spouse relief. A tax debt for which collection due process hearing is requested regarding a levy to collect a debt.
In addition, the IRS will not certify you as owing a seriously delinquent tax debt if you are in bankruptcy or if your account is currently determined as not collective due to hardship. You will also not be certified if the IRS identifies you as a victim of tax-related identity theft. The IRS may postpone the certification for individuals participating in a contingency operation and those serving in a designated combat zone.
How Will I Be Notified If the IRS Certifies My Tax Debt as “Seriously Delinquent”?
Once the IRS certifies your tax debt as seriously delinquent, the agency will send you Notice CP508C by mail. Before your passport is denied or revoked, you will have 90 days to make full payment, resolve any erroneous certification issues or enter a payment arrangement with IRS.
What Options Do I Have If I Can’t Pay the Full Federal Tax Amount Owed?
If you cannot pay the full federal tax amount, you can take specific actions that ensure your previously certified federal tax debt is considered no longer seriously delinquent.
These actions include:
- Installment agreement with IRS that allows you to pay the debt over time.
- Offer in Compromise agreement to settle your tax debt for less than the full amount.
- Agreement with the Justice Department to satisfy the tax debt.
- Where applicable, innocent spouse relief under Internal Revenue Code Section 6015.
- Timely request for a tax collection due process hearing.
How Long Does It Take to Reverse Certification?
The IRS makes a reversal within 30 days once it establishes either that the debt has been paid in full, is legally unenforceable, is no longer seriously delinquent, or the certification is erroneous. The IRS sends the reversal notice to the state department as soon as the reversal is completed. You will be notified of the reversal through mail sent to your last known address.
How Can Wiztax Help?
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