Could I Lose My Passport If I Owe Money to the IRS?
If you owe back taxes to the Internal Revenue Service (IRS), you may wonder what the most likely penalties or problems you could face. The IRS currently has the power to garnish your wages and even put a lien on your property, but what else can the IRS do if you fail to pay your bill?
What Is The FAST Act?
According to a new law that was passed in late 2015, if you owe significant taxes to the IRS, the government now has the right to take passports from those who have not paid their debt. This law is called “Fixing America’s Surface Transportation Act” (FAST Act). The law provides long-term funding for transportation projects, including new highways, but also gives the State Department the right to revoke passports.
How Does the FAST Act Work?
You may wonder how this works since the IRS and the State Department are two different government entities. The IRS now provides information about seriously delinquent taxpayers to the State Department so that the State Department can revoke a passport for an individual who has a significant tax debt. Significant tax debt is defined by the law as “an unpaid, legally enforceable federal tax liability” greater than $50,000, including interest and penalties. This amount will be adjusted each year for inflation and cost of living.
There are a couple of important things to note about this law if you are concerned that it may impact you:
- If you are currently making payments on an approved installment agreement or an Offer in Compromise with the IRS, then you will not be subject to this new law.
- You should receive a written notice from the IRS if your information is being sent to the State Department that offers you 90 days to allow you to resolve any errors, make full payment, or enter into a satisfactory payment plan. The State Department will hold your passport request (or renewal during that time). There is NO grace period given before the State Department can revoke an existing passport.
- According to the IRS, they will begin sending information on delinquent taxpayers to the State Department beginning in early 2017. Their website will post updates.
- Keep an eye on how this law evolves and how it intersects with the REAL ID Act, that states that beginning in January 2018, all travelers with a driver’s license or identification card issued by a state that does not meet certain standards must present an alternative form of identification acceptable to the TSA. One of the acceptable identifications is a passport. So, if you are delinquent in paying your taxes, you may begin to have trouble flying domestically as well.
Settle Your Tax Debt Today
The bottom line is that if you owe the IRS money, the best thing you can do is settle your debt—and the sooner, the better. Success Tax Relief is a full service tax firm that can help you develop a plan to solve your tax issues once and for all. Our team has helped countless taxpayers from Texas and around the country get out of tax debt once and for all. Stop worrying about the IRS garnishing your wages, taking your property, or even your passport! Call us today at 877-825-1179 for help.