Issues related to tax debt are invariably stressful, but recent changes have added yet another layer to the difficulties that outstanding obligations to the government can bring. Starting in the latter part of 2015, the Internal Revenue Service has assumed the authority to utilize passports as a means to collect delinquent amounts. While the IRS itself does not directly seize the passports of those with unpaid taxes, it can and will have the Department of State do so on its behalf.
These relatively new collection tactics are not applicable just to criminal tax matters or situations in which the agency believes the tax debtor may attempt to leave the country. Anyone with seriously delinquent tax obligations of $50,000 or more may be in danger of having a passport application or renewal request denied by the State Department. It should be noted that the $50,000 threshold includes penalties and interest assessed on the original amount owed. Those caught in this predicament should also realize that making a payment sufficient to reduce the remaining debt below $50,000 is not likely to result in a reversal of any passport sanctions already imposed.
Fortunately, there are some due process protections in place through which amounts alleged by the IRS to be delinquent can be challenged, payment arrangements can be made, and extenuating circumstances are taken into consideration. Those who have had passport-related penalties imposed due to tax debts that belong only to their husband or wife may also be able to obtain relief under the agency’s innocent spouse rules.
The ability to travel freely around the world is something most everyone takes for granted. However, because the IRS now can set passport issuance and renewal restrictions in motion as a powerful collections tool, it is more important than ever for taxpayers to avail themselves of experienced legal counsel.
If you suspect are in danger of having your passport privileges revoked due to lingering tax debt, I invite you to contact my Tampa office to schedule a helpful and informative consultation.