While federal taxes are the realm of the IRS, and passport issuance is under the purview of the State Department, the IRS is able to influence other governmental agencies when it comes to overdue taxes.
While the IRS can take away your driver’s license or your professional business license if you’ve fallen behind on your taxes, denying or revoking your passport is a sign that your debt has reached “seriously delinquent” status. If you owe the IRS more than $59,000 total in back taxes, penalties, and interest (this is the 2023 number, which is adjusted annually for inflation), then your debt has been classified as “seriously delinquent tax debt.”
When this happens, the IRS can certify your debt to the State Department, which will prevent the State Department from issuing or renewing your passport. They may even revoke your current passport, and if you are abroad, they can issue a limited use passport that will only allow you to return to the USA.
The Steps Leading Up to Passport Denial
The IRS will send several mailed notices of your back taxes and your options if you owe money. However, this is a unique situation where you may not be aware that your tax debt has become seriously delinquent until you apply for a passport and get denied!
Your tax debt must meet these qualifications in order for the IRS to certify it to the State Department:
- You owe a total $59,000 or more in past due taxes, penalties and interest (as of 2023).
- The IRS must file a notice of federal tax lien, and you must have had your Collection Due Process hearing or missed your deadline for the hearing.
- The IRS must issue a levy against you.
If your debt meets these qualifications, the IRS will send a CP508C notice to your last known address to inform you that you have seriously delinquent tax debt. However, if they send the notice to the wrong address, or if you are abroad and experience a long delay in mail delivery, you may not be aware that the State Department has been notified of your debt status.
Once your debt is certified with the State Department, if you apply for a passport or passport renewal, they will hold your application for 90 days to give you time to address your debt with the IRS.
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Reasons the IRS Will NOT Notify the State Department of Your Debt
Even if you owe taxes that qualify as “seriously delinquent tax debt,” you may not necessarily be at risk of a passport restrictions. In general, if you are showing a good faith effort to address your tax debt or you have shown that you are experiencing a hardship, the IRS will not report your status to the State Department. This means you can still get a passport or have your passport renewed.
Specifically, here are a list of reasons that the IRS will not certify your tax debt to the State Department:
- If you are paying back your debt through an approved installment agreement payment plan, an offer in compromise, or have a pending request for either of those payment methods.
- If you have made a request for innocent spouse relief.
- If you have made a timely request for a Collection Due Process hearing.
- If you have made a request for Currently Not Collectible status.
- If you are the victim of tax-related identity theft.
- If you are located within a federally declared disaster area.
- If you are in bankruptcy proceedings.
Even if you have entered a payment plan with the IRS, it’s important that you remain in good standing with your payments. If you fall behind and miss too many payments, you may still get your passport revoked.
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How to Avoid Passport Hold or Denial
If you have severe tax debt that is growing large enough to risk your ability to get a passport, it’s time to learn about tax debt relief options. At this point you are risking liens, levies, wage garnishment and more. Having your passport application get denied is just one more reason to take quick action to resolve your tax issues.
For taxpayers that owe the IRS back taxes totaling $10,000 or more, it may be very beneficial to work with a tax professional on resolving your tax debt. They can take a holistic look at your finances and guide you on the best approach to your debt, which may be an offer in compromise or an installment agreement.
Someone like a tax attorney will have the skills needed to help you get a passport if your tax debt is erroneous. They can help you show the IRS that it was your spouse who incurred the delinquent tax debts, or that there was another error in the IRS’ calculations. If there are no errors, then a tax lawyer has experience in negotiating a settlement agreement with the IRS on your behalf.
In the end, the only way to avoid problems with your passport status is to pay your tax debt, enter a payment agreement with the IRS, or get any errors resolved. Having an experienced tax professional on your side will help ensure you take the right steps for your particular situation.
Let S.H. Block Help You Get a Passport—Even if You Owe Back Taxes
Not having a passport can keep you from visiting family, interfere with your professional career, or prevent you from taking an amazing vacation in a foreign country. At S.H. Block Tax Services, we know what a challenge this can be. That’s why we want to help.
We have years of experience helping people just like you: taxpayers who have fallen behind on their income taxes or business taxes and need some help finding relief. Since every situation is different, we’re inviting you to join us for a free consultation so we can get to know the specifics of your case. Call our office at (410) 793-1231 or fill out this form and we can give you our honest opinion on what your best option may be.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.