Tax debts can affect more than just your finances—they can also affect your ability to travel. If you have outstanding tax payments, you may find that they can have a significant effect on your passport. The IRS has released a new notice that details how your tax debts may impede your future travels.
The IRS and State Department have recently been cracking down on the passports of delinquent taxpayers. So, should you cancel your vacation plans if you have unpaid tax debts? Not necessarily. Let’s take a look at whether your passport can be affected by your delinquent payments, and what you can do about it.
Once a taxpayer’s debt is certified to be seriously delinquent, the Internal Revenue Service (IRS) has an obligation to notify the State Department. The State Department will then evaluate the individual case, weighing whether the debtor may be a flight risk. The taxpayer will typically have 90 days to resolve their delinquency before their passport is affected. If the debt is not paid, the State Department will typically deny an issuance or renewal of the individual’s passport.
Who could be affected?
Taxpayers who have minor outstanding payments don’t need to worry just yet. This rule is usually only implemented for seriously delinquent tax debts that are over $50,000. Take note, however, that this amount also includes penalties and interest. Someone who has outstanding tax payments of $20,000 could easily be targeted under this law if their payments rise to $50,000 with penalties and interest.
How to address delinquent payments
The IRS offers a few solutions to taxpayers who have delinquent tax debts. One option is to pay your back taxes in full. If this is not a solution, it may also be possible to pay your back taxes in installments. You also have the option of working with a tax attorney in an attempt to reach a compromise with the IRS.