When your unpaid tax debt has become “seriously delinquent” according to the IRS, they might take aggressive collection actions to compel you to rectify your back taxes situation.
One of the most severe actions at the IRS’s disposal is to have the U.S. Department of State place restrictions on your passport. (Read more: “Can the IRS Deny or Revoke a Passport for Tax Debt?”).
This means that even if you have an active passport, you might not be able to travel with it. If you apply for a new passport or a renewal, the Department of State might deny your request on account of your seriously delinquent taxes.
To inform you of its intent to restrict your passport due to seriously delinquent taxes, the IRS sends a CP508C notice.
Here is more information about IRS notice CP508C and how to respond to it:
What Is a CP508C Notice and Why Did I Get It?
A CP508C notice is a letter sent to taxpayers the IRS has certified as being “seriously delinquent.” It notifies them of the IRS’s intent to notify the U.S. Department of State, who can deny, revoke, or limit your passport.
You received IRS notice CP508C because your unpaid back taxes crossed the seriously delinquent federal tax debt threshold.
When does the IRS Consider Tax Debt “Seriously Delinquent”?
The IRS considers a tax debt seriously delinquent when the debt totals more than $55,000 and the IRS has not been able to resolve it with liens or levies. The $55,000 seriously delinquent federal tax debt amount includes interest and penalties and is adjusted annually for inflation.
What Should I Do When I Receive a CP508C Notice?
You should respond to the CP508C notice within 30 days. If you disagree with the CP508C, you can initiate a dispute by calling the phone number provided on the notice.
Before filing a dispute, you should gather all evidence you have to support your claim that you do not have a seriously delinquent tax debt.
If you agree the tax debt in your CP508C notice is legitimate, you still need to respond if you want your passport reinstated. You can arrange to pay or set up an IRS installment agreement.
How Does a CP508C Notice Affect My Passport and Travel Plans?
Once the IRS certifies your tax debt as seriously delinquent and you receive a CP508C notice, they can instruct the U.S. Department of State to place restrictions on your passport. You will likely get declined if you apply for a new passport or try to renew your current one.
Even if you have an active passport, the Department of State might place restrictions on it, not allowing you to travel to certain places or at all.
What Do I Do to Have Seriously Delinquent Certification Reversed After I Receive a CP508C Notice?
To have seriously delinquent certification reversed, you must pay the tax debt, set up a monthly installment agreement and begin making payments, or convince the IRS that the seriously delinquent certification was made in error.
Simply paying enough of your tax debt to bring it below the $55,000 threshold will not result in the certification being reversed.
How Long Does It Take to Get My Passport After Seriously Delinquent Certification Is Reversed?
Once you resolve the issue, the IRS will notify the U.S. Department of State within 30 days that your federal tax debt is no longer seriously delinquent. As anyone who has applied for a passport in recent years knows, the Department of State has a reputation for getting backlogged and moving slowly, so there is no guarantee as to how long reinstatement will take.
For a passport status update, contact the U.S. Department of State directly.
If I Receive a CP508C Notice but Can’t Pay the Full Amount I Owe, Can I Still Reverse Seriously Delinquent Certification to Keep My Passport?
Yes, you can reverse the seriously delinquent certification after you receive a CP508C notice either by setting up an installment agreement and making payments on it, or by having an Offer in Compromise accepted by the IRS and paying the agreed-upon lower amount.
Who Should I Call If I Disagree with My CP508C Notice and the Tax Debt Amount?
You can contact an IRS representative by calling the phone number provided on your IRS CP508C notice. You might first consult a tax professional for advice on how to file a successful CP508C dispute. You can schedule a free call with us.
How Can Wiztax Help?
The key is to get started. Ignoring these notices makes everything more complicated. Call us today at (866) 568-4593 to learn more about how we can help (we never charge for “consultations” or “investigations”).
Or start here to take our free online evaluation. Regardless, we promise to save you thousands in fees.
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