In December 2015, we brought you the news of a new law regarding passports and tax debt. This law, which allows the US State Department to deny or revoke passports if the traveler owes taxes to the Federal Government, is about to come into force.
This law won’t affect the vast majority of travelers. But if you owe federal tax debt of $50,000 or more, you could soon find yourself without a passport!
The IRS has just released detailed information about the tax debt and passport law, and how it will be enforced. Let’s take a look at the most important details.
The IRS Will “Certify” Citizens with Tax Debt
The IRS is currently going through their records to identify individuals with major outstanding tax debt. They are looking for people who:
- Owe more than $50,000 in unpaid Federal taxes.
- Have had a federal tax lien filed or a levy issued.
- Are not in the process of paying back or negotiating their tax debt.
People who meet these criteria will be “certified” and will have their names and Social Security Numbers sent to the State Department.
How Will I Know If I’ve Been Certified?
If you are on the certification list, the IRS will notify you by mail. They will send an official form to your last known address to let you know that the State Department has been informed of your tax debt. This form is known as Notice CP 508C. It will include a phone number you can call for more information about your case.
Does Being Certified Mean My Passport is Automatically Revoked?
IRS certification doesn’t mean that your passport is immediately cancelled. It’s still up to the State Department to make the determination to revoke your passport. They have the right to cancel your passport immediately, with no grace period.
What Happens If I Apply for a Passport After Being Certified?
If you are on the IRS certification list for your tax debt, and you apply for a passport, your application won’t automatically be rejected. Instead, the US Department of State will hold your application for 90 days to give you time to resolve your debt. If you haven’t paid off your debt or entered into a payment plan within that 90 days, your application will be rejected. You won’t be able to get a passport until after your debt has been addressed.
How Can I Get Off the Tax Certification List?
After you’ve been certified as a “seriously delinquent” tax debtor, you’ll have to deal with your debt before you can get a passport.
If you believe that you were certified in error, you have the right to file suit in US Tax Court or US District Court. The court will order that your certification be reversed if you win your case.
The simplest way to get off the certification list is to pay off your tax debt! Can’t afford to pay your full debt at once? You can work out a payment plan to pay in installments. Alternately, you can negotiate an “offer in compromise” to settle your debt.
Please note that you can’t get off the certification list just by paying your debt down below the $50,000 mark. You’ll need to either pay it all off, or have arrangements in place to satisfy the whole debt.
The tax debt wasn’t your own? If you’ve been certified because of your spouse’s tax debt, you can file for “innocent spouse” relief.
We recommend that you seek the services of a qualified tax attorney to help you resolve your tax debt!
What Happens When My Certification is Reversed?
You’ll be notified by mail when your certification is reversed. The IRS will mail you Notice CP 508R to let you know that you are no longer on the certification list.
The IRS may take up to 30 days to reverse your certification and notify the State Department after your debt is cleared.
Once you’ve gotten Notice CP 508R, you are free to apply for a new passport.
What If I Need a Passport Urgently?
If you have received notification that you’ve been certified by the IRS, you can continue to use your passport until the State Department notifies you that your passport has been revoked. Not sure if your passport has been revoked or not? You can call the National Passport Information Center at 877-487-2778 to confirm your passport status.
You can contact the Department of State at the number listed on Notice CP 508C if you have urgent passport needs. You may be able to have your current passport adjusted to a limited validity passport that you can use for urgent travel.
Once you have cleared your debt, you can call the phone number listed on your certification notice if you need to have a passport issued on an emergency basis.