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Many may be surprised to learn the Internal Revenue Service has the authority to work with other government agencies to deny the renewal or revoke a passport. This power was granted under the Fixing America’s Surface Transportation (FAST) Act originally passed by Congress in late 2015. Through this process, the IRS notifies the State Department of a taxpayer’s status (owing $52,000 or more in overdue taxes), and then the State Department is required to deny a requested renewal or application. Under certain circumstances, if the taxpayer is already outside the United States, they may be given a timeframe to return before their passport becomes invalid. This enforcement action is designed to provide another tool to the IRS to ensure taxpayers are meeting their payment responsibilities. To help prospects and others with a concern, JLK Rosenberger has outlined how to resolve passport issues below.
Resolving Denied Applications
If an application for passport renewal has been rejected because of an outstanding balance, a taxpayer may elect to contact the IRS to have their status changed. The good news is the IRS can expedite the process and reverse certification with the State Department. In order to take advantage of the expedited process, the taxpayer must provide the IRS proof of scheduled travel and copy of denial letter. During this time, the IRS will attempt to obtain debt resolution. The key is the taxpayer must act in “good faith” and demonstrate they are willing to pay their tax debt (to the extent they are able). At this time, the IRS can issue a change of status which will permit the State Department to renew the taxpayer’s passport.
Resolving Tax Debt
There are many methods a taxpayer can pursue to settle their tax debt. The most preferred method by the government is to pay the debt in full immediately, but this is not an option for most. Other avenues to compliance include paying the tax debt through an approved installment agreement, making an offer in compromise, making a settlement with the Department of Justice, or even having collection suspended due to an innocent spouse election.
Prior to dealing with the IRS, it’s always a good idea to retain a qualified tax professional to review your situation and provide guidance on the matter. There may be opportunities to reduce the total outstanding amount owed to the IRS. These additional enforcement methods are designed to compel taxpayers to address their outstanding balances. If you have an issue with passport renewal or need assistance with delinquent taxes, JLK Rosenberger can help! For additional information call us at 818-334-8623 or click here to contact us. We look forward to speaking with you soon.