Understanding IRS Notice CP508C: Passport At Risk
The IRS Notice CP508C, often titled 'Passport At Risk of Revocation,' serves as a critical wake-up call for taxpayers. Issued in accordance with the Fixing America’s Surface Transportation (FAST) Act, this notice can restrict your passport privileges due to seriously delinquent tax debt. This article aims to demystify the CP508C notice, offering insight into its implications and the steps needed for resolution.
What is an IRS Notice CP508C?
IRS Notice CP508C is a notification sent to taxpayers with outstanding “seriously delinquent tax debt.” As part of the FAST Act, the IRS is required to notify the State Department of individuals owing more than $54,000 in back taxes, penalties, and interest. The State Department can then deny, revoke, or limit passport issuance or renewal (26 U.S.C. § 7345).
Criteria for Seriously Delinquent Tax Debt
According to the IRS, seriously delinquent tax debt, under 26 U.S.C. § 7345, exceeds $54,000 and meets certain conditions such as having a levy issued, lien filed, or involvement in a Notice of Federal Tax Lien. Exceptions include debt that is being timely paid under an installment agreement or offers in compromise.
Impact on Passport Privileges
When notified, the State Department will hold any pending passport applications and deny new applications or renewals. Existing passports may be revoked. The notice gives you an urgent signal to address the tax debt promptly.
Steps to Resolve a CP508C Notice
- Pay the Full Amount: Liquidating the debt with a full payment will prompt the IRS to communicate your compliance to the State Department.
- Installment Agreements: Arrange a payment plan with the IRS if full payment isn’t feasible (see Form 9465).
- Offer in Compromise: Explore settling the debt for less than the total amount (Form 656).
- Challenge the Debt: If you believe the notice is erroneous, seek to reverse it by providing supporting documentation to the IRS.
- Seek Innocent Spouse Relief: If applicable, this can remove your liability for additional taxes due to a spouse’s incorrect reporting (Form 8857).
Legal Recourses
If the IRS refuses to alter its certification, taxpayers can take legal steps. The Taxpayer Advocate Service may offer assistance, and you can sue the IRS under 26 U.S.C. § 7345(e) in U.S. District Court or Tax Court to overturn the certification.
Conclusion
Dealing with a CP508C notice can be overwhelming, but addressing the debt proactively can lead to resolution. The IRS provides pathways such as payment plans, compromises, and legal recourse options to help resolve these issues. Take concrete steps to clear your debt and protect your passport privileges.
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