WEDNESDAY // JANUARY 24, 2018
TOURING INTERNATIONALLY WITH OVERDUE TAXES? NOT HAPPENING
Picture this: You’re mentally prepared to leave the country for The Killers South American tour in about a month and a half. You’ve taken care of things at home and more than excited for the adventure ahead. Then it hits you: You need to renew your passport. Passports take about eight weeks to renew, but you’ll just expedite it for reassurance, you think to yourself.
You then head down to your local post office for passport renewal.
Denied?! What do you mean denied?!
The new Notice 2018-01 includes new rules regarding tax debts ultimately preventing one from receiving or renewing a passport, reported Robert W. Wood on Forbes. Additionally, the State Department may choose to revoke your current passport after the IRS notifies your tax debt as “seriously delinquent.”
From this Forbes article, we’ve outlined the main things you’ll need to know and do step-by-step when faced with this nightmare - or simply want to avoid it.
Two VERY important things to know:
- A “seriously delinquent” tax debt means you owe over $50,000, but be aware this is the total including penalties and interest - so $20,000 has this ability to accumulate to $50,000.
- The sooner you respond to IRS notices prior to this phase, and continue protest / disputing, a tax debt does NOT finalize - so stop ignoring those notices!
By law, the IRS is required to notify the State Department when things get to this point. In fact, the law was enacted three years ago but have now decided to put regulations into play.
I got myself into this mess. What now?
- If possible, pay the taxes in full right away
- Enter into an installment agreement with the IRS
- Paying your tax debt overtime will eliminate the IRS label “seriously delinquent” as long as payments are made on time
- Offer a compromise
- You are entitled to a Collection Due Process (CDP) hearing before Appeals if the IRS sends you a notice. Click here for more details.
So it feels like life completely sucks at this point, but you don’t have to find a new job or make any drastic life changes - yet. You have to act quick, because the State Department gives you only 90 days to fix the issue before denying the passport application.
But I need my passport within these 90 days!
You then must contact the IRS yourself and resolve the issue 45 days within your application date.
The IRS made a mistake! I already fixed my tax debt! / My tax debt is NOT seriously delinquent!
If your case falls under either of these scenarios, your next step is to file a civil action in court. Although you cannot physically go and challenge the certification or IRS decision at the IRS Appeals, you may contact the IRS Notice CP508C phone number to request certification reversal.
This has not happened to me, but the thought of it haunts me enough. How do I prevent this from happening to me?
You should have received plenty of notices from the IRS before reaching the “seriously delinquent” stage. Remember, the more you respond and continue a dispute, your tax debt will not finalize. If you receive an IRS Notice of Proposed Deficiency / Examination Report:
- Prepare a protest BEFORE the deadline
- You’ll be prompted to visit the IRS Appeals Office, where you’ll then have an opportunity to resolve the issue once and for all
- If you cannot resolve the issue (or fail to protest altogether), the IRS will send you a Notice of Deficiency
- Finally, you’ll have 90 days to file in the U.S. Tax Court. Click here for tips on how to respond to an IRS Notice.
