1. CAN you get a passport if you owe taxes? Of course, you can. But if your taxes, penalties and interest total more than $50,000, you fall under a new category called “seriously delinquent” that subjects you to passport restrictions.
2. What exactly are passport restrictions? The State Department will deny your passport application or revoke your current passport.
3. When is this new law effective? Actually, it has been in the books since 2015 when President Obama signed it into law but certifications were re-scheduled for January 2018 under President Trump’s watch.
4. What are certifications? IRS does not have the authority to seize passports so it “certifies” individuals who have “seriously delinquent” tax debts to the State Department which denies or revokes passports.
5. Why did Congress create passport restrictions? The Government Accountability Office issued a report on the government’s inability to collect $5 billion from 200,000 who were issued passports. The report recommended that Congress enable IRS and State Department to coordinate and use passports to collect unpaid taxes.
6. Who is affected? The passport restriction will mostly affect people who travel internationally and owe seriously delinquent tax debts. It may also affect domestic travel. Bad.
7. How will I learn that I have been referred for passport seizure or revocation? IRS will send Letter 508C (Notice of Certification of your Seriously Delinquent Federal Tax Debt to the State Department) to your last-known address. At that time, IRS will also send the certification to the State Department which will also send you a separate notice about your passport restrictions.
8. Who can I call to check if I’m subject to passport restriction?
Call the National Passport Information Center at (877) 487-2778. You may want to set up an agreement by calling the IRS at (855) 519-4965 for domestic calls, (267) 941-1004 for international calls. Consider hiring a tax professional to help settle your debt with the IRS. This is serious business.
9. How can taxpayers get their passport restrictions lifted? You must get back into good standing with the IRS. Pay your entire tax bill or set up an installment agreement. IRS will send a decertification letter to the State Department which then lifts your passport restrictions within 30 days.
10. Can you just pay the balance to under $50,000 to remove passport restrictions?
No. Reducing the amount under $50,000 will not decertify your account.
Tip 1: Pay the balance to under $50,000 and set up a streamlined installment agreement for the rest.
Tip 2: If you owe between $50,000 and $100,000, use new IRS expedited installment agreement process to quickly get in good standing with the IRS. If you owe more than $100,000, pay the balance down to under that amount to get into a special 84-month payment plan. This process buys you time. Do this before your case is submitted to the State Department.
Beware: TSA could require passports rather than driver’s licenses to board flights, including domestic flights.
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.
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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies. He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at [email protected].