Beginning January 2018, the IRS will start certification of individuals with delinquent tax debt to the State Department.
How will the IRS certification impacts you?
• Upon receipt of certification. The State Department will either deny application or revoke current passport or both.
• You are overseas. Limited validity passport for direct return to the US maybe issued by the State Department if you are overseas.
• Serious delinquent tax debt. IRS tax debt of more than $50,000 inclusive of penalties plus interest for which all administrative remedies has been exhausted, and federal tax lien and levy notices have already been issued. A tax debt is not considered serious if there is: a) installment agreement; b) offer in compromise; c) timely collection due process hearing related to the levy; d) innocent spouse relief under IRC § 6015 has been requested and collection is suspended.
• 90-Days hold of application. You will be given 90-days to resolve and enter into payment options with IRS to resolve certification issues by the State Department and will hold your application prior to denial of passport application.
• Be aware of Notice CP 508C. You will receive notice CP 508C upon certification of IRS to the State Department of serious tax debt, by mail.
• Certification reversal CP 508R. The State Department will be notified within 30-days by the IRS to reverse previous certification of serious tax debt once assessed tax debt is no longer serious in 3. above or due to erroneous certification.
• Passport application is denied. You will be notified in writing by the State Department if your passport application is denied or revoked.
• You owe taxes and cannot pay in full. Apply for installment agreement or offer in compromise if you qualify, to reverse the certification and for issuance of passport.
• Disagreement with the tax amount. Call the number provided on notice CP 508C. For proof of payment, mail to the address on the notice.
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Disclaimer: Any accounting, business or tax advice contained in this communication is neither intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.
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Al-os & Associates Accountancy Corporation provides accounting and tax services to individuals, corporations, LLCs and business entities. The Firm has a niche in defending taxpayers audited by the IRS and other governmental agencies.