Notice of Passport Action for Seriously Delinquent Debt: An Expert Guide

Understanding the Notice of Passport Action for Seriously Delinquent Debt

The Internal Revenue Service (IRS) issues a Notice of Passport Action for Seriously Delinquent Debt to taxpayers who owe significant tax debts. As of the latest update, a seriously delinquent tax debt is defined as an unpaid, legally enforceable federal tax debt totaling more than $55,000, including interest and penalties, for which a lien or levy has been filed. This enforcement aligns with the Fixing America's Surface Transportation (FAST) Act, which became law in December 2015.

The Relationship Between Tax Debt and Passports

An integral provision of the FAST Act is its mandate that the IRS notify the State Department of any individual with seriously delinquent tax debt. Upon receiving such certification, the State Department can deny that individual’s passport application or renewal. In certain cases, it may even revoke an existing passport, imposing significant travel restrictions.

IRS Certifications and Exceptions

According to IRS Code Section 7345, the IRS is required to certify seriously delinquent debts to the State Department. However, understanding the exceptions to this certification process is crucial for affected taxpayers:

• Debt that is being paid under an IRS-approved installment agreement.
• Debt that is subject to an offer in compromise accepted by the IRS.
• Debt for which a collection due process hearing is ongoing, or where innocent spouse relief has been requested.
• Debt that meets criteria for suspension due to being a victim of identity theft, disaster, bankruptcy, or for those living in a federally-declared disaster area.

Steps to Addressing a Notice of Passport Action

Receiving a Notice of Passport Action due to seriously delinquent debt requires prompt and informed action. Here's a step-by-step guide:

1. Verify the Accuracy of the Debt

Begin by understanding the details of your tax debt. Review your IRS account or contact the IRS directly for a breakdown of the amount owed.

2. Explore Resolution Options

Consider negotiating an installment agreement or an offer in compromise if you cannot pay the debt in full. Consult IRS Form 9465 (Installment Agreement Request) or Form 656 (Offer in Compromise) for more information.

3. Appeal If Necessary

If you believe the certification is incorrect or your debt doesn't qualify as seriously delinquent, you have the right to appeal. Initiate this process promptly to prevent passport-related issues.

4. Maintain Communication with the IRS

Proactive communication with the IRS can help manage expectations and mitigate further penalties or administrative actions against you.

Frequently Asked Questions (FAQs)

• What does 'seriously delinquent tax debt' mean?

  Per IRS guidelines, seriously delinquent tax debt refers to debts exceeding $55,000 for which a notice of lien or a levy has been filed by the IRS.

• Can the IRS revoke my passport?

  The IRS itself cannot revoke a passport, but it can certify the delinquency to the State Department, which may then revoke, deny, or limit passport usage.

• How can I dispute a certification of serious delinquency?

  You can request a reversal of the certification through IRS Form 843 or initiate a collection due process hearing if you believe the certification is in error.

• What are the consequences of ignoring the notice?

  Ignoring the notice can lead to travel restrictions and continued accrual of interest and penalties, worsening your financial situation significantly.

• How can I resolve this issue quickly?

  Paying the debt in full or entering into an approved payment arrangement with the IRS are the quickest methods to resolve the debt and remove passport restrictions.

For personalized assistance, access expert advice and manage your IRS interactions effectively by visiting your dashboard.