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BACK TAXES AND TAX DEBT

Passport Revocation or Denial for Severe Tax Debt

Jo Willetts, EA Director, Tax Resources Published On December 29, 2020

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Having delinquent tax debt can have harsh consequences. This makes it important for you to understand the consequences and how to resolve these issues. One of those consequences is the government can stop you from getting, or seize, your passport.

Since 2018, anyone with seriously delinquent tax debt can be certified by the IRS to the State Department. This allows the State Department to deny a passport application or revoke a current passport.

What qualifies as severe tax debt?

The IRS defines serious delinquent tax debt as a taxpayer’s “unpaid, legally enforceable federal tax debt totaling more than $54,000,” after all administrative remedies or levies(legal seizure of one’s property) have been exhausted.

How do I know if I have severe tax debt?

If you have severe tax debt, you will receive a CP508C Notice from the IRS. It is important that you open the letter right away. It will tell you why you are receiving the letter and what steps you can take to resolve your debt. It is extremely important that you address the situation quickly. Remember, scammers often try to hide behind the IRS. If you are contacted via anything other than a letter (phone call, email, and social media are high fraud examples), it may be fraud and requires additional verification.

The State Department will give you 90 days before denying your passport so you can fix any certification issues, fully pay the tax debt, or reach a payment agreement with the IRS.

Tax debt situations that the IRS will not submit to the State Department:

There are many types of tax cases the IRS does not certify to the State Department. These include taxpayers who are:

  • In bankruptcy
  • A victim of tax-related identity theft as identified by the IRS
  • Someone who has an account the IRS has determined is not collectible due to hardship
  • Living in a federally declared disaster area
  • Someone who has a pending installment agreement request with the IRS
  • Serving in a designated combat zone or participating in a contingency operation

For other reasons you may be disqualified please, the IRS provides a more in-depth list.

What to do if your passport has been denied or revoked due to severe tax debt:

If your passport has been denied or revoked because of your severe tax debt, you have options to address your debt. You can quickly fix the issue by paying in full or make an alternative payment plan, an Offer in Compromise, or a settlement agreement. You also have three different options if you are an innocent spouse looking to be absolved under Innocent Spouse Relief.

Your certification will be reversed if your tax debt is completely satisfied, legally unenforceable, the tax debt is not seriously delinquent, or if the certification is incorrect. 

However, getting your tax bill under $54,000 will not automatically reverse your certification. You must also enter into an agreement with the IRS to become compliant. This means a payment program, offer in compromise, or other qualifying arrangement is also required.

What if the certification was made in error?

If you think that the certification was made in error or the tax amount was inaccurate, you should call the number at the top right of your notice. If you have already paid, proof of the payment needs to be sent to the address on your notice.

How will I know if my certification has been reversed?

If your certification is reversed you will receive a CP508R Notice. This means the State Department has been notified of the reversal, and you do not need to respond. However, it is important that you keep this notice in your records, continue to make your payments on time, and meet all the requirements of any installment agreements or offers in compromise that you agreed to.

How long will it take to get my passport after the certification is reversed?

As soon as you have resolved your tax issue with the IRS, they will reverse the certification to the State Department within 30 days.

About the Author

Jo Willetts, Director of Tax Resources at Jackson Hewitt, has more than 25 years of experience in the tax industry. As an Enrolled Agent, Jo has attained the highest level of certification for a tax professional. She began her career at Jackson Hewitt as a Tax Pro, working her way up to General Manager of a franchise store. In her current role, Jo provides expert knowledge company-wide to ensure that tax information distributed through all Jackson Hewitt channels is current and accurate.

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