Last year, we gave readers a reminder regarding their federal taxes: Do them, or risk losing your passport. If you recall, the IRS had issued a warning to taxpayers highlighting a series of stipulations that could warrant the confiscation of one’s passport. In summary, if you have been marked as someone with “seriously delinquent” federal debt, you risk losing your ability to travel out of the country. This statement was brought on by the spike in tax evasion recently and officially went into effect as the new tax season began.
If this may apply to you, and you plan to travel internationally in the near future, here’s what the team at Hall & Company want you to know:
Ways To Resolve
The IRS states that there are several ways a delinquent taxpayer can resolve his or her passport revocation issues. In general, the government stipulates that efforts must be made to begin paying the debt. If it is not paid in full, or in accordance with an agreed upon installment plan, then individuals may file for an appeal with a levy, or make an innocent spouse election. All of this is to avoid a major pitfall: Having the Internal Revenue Service notify the State Department of their seriously delinquent tax debt. Before denying a passport renewal or application, the State Department will enact an additional 90-day waiting period to allow taxpayers to resolve their issue with the IRS. If there is still no resolution, that is when penalties will ensue.
If you fall under the seriously delinquent category, but a solution seems out of reach, you may still be in luck. The federal government has programs to provide relief for unpaid taxes. The first is in the form of a payment agreement. By filing a Form 9465, you can apply for a payment plan, which can help break down your debt into monthly installments. There is also the option to make a compromise. If you qualify and offer in compromise with the IRS can potentially settle your debt for a value less than the amount initially owed. Use their tool to see if you are eligible for this ease in tax liability.
We understand that tax season brings many unanswered questions along with it. If you believe you are at risk of being reported for seriously delinquent taxes, your best option is to speak to a professional. Our team of experts is well versed in tax law and will find the best solution for your unique situation. For more information on other financial topics, check out our blog.