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Seriously Delinquent on Your Taxes? Prepare to Be Grounded.

As this year’s tax deadline approaches, some may be dreading the prospect of paying taxes that are coming due. Perhaps this year’s debt will only be compounding an already significant mountain of tax debt. Before you make the decision not to pay, understand that the IRS can be relentless when it comes to collecting on tax debt. Any tax collections lawyer can attest to that. However recently, their activities may have far reaching implications on your life that you had not considered.

The IRS Travel Ban

While the IRS has no direct control over your passport, the Fixing America’s Surface Transportation Act, or “FAST Act” now gives the IRS the power to have your passport revoked if you are “seriously delinquent” in the payment of your taxes. The law, which doesn’t truly involve travel or your passport, is designed to increase revenue for the repair and development of highways and roadways in the U.S.

If the IRS determines that you are seriously delinquent in paying your taxes, it may inform the State Department, who then have the power to revoke, suspend or refuse to issue a passport to you. By law, the IRS must notify you in writing that they have certified the debt with the State Department. The State Department will hold your passport new or renewal application for 90 days to allow you to resolve the issue. If the State Department has already issued your passport, there is no grace period for revocation.

Seriously Delinquent Taxes?

The FAST Act defined “seriously delinquent” taxpayers as those who owe $50,000 or more in taxes (adjusted annually for the cost of living).  There are exceptions to this provision.  If you are making payments under a repayment agreement or Offer in Compromise, your passport is not in danger.  Additionally, if you have timely requested a Due Process Hearing regarding a levy, or if collection has been suspended under an innocent spouse claim, your passport is protected until such time you are deemed in delinquency.

This Only Affects International Travel, Right?

While for some, revocation of a passport simply means no exotic vacations or international business travel. However, under the Real ID Act, more and more people may be prohibited from flying domestically without a passport.

Under the Real ID Act, the federal government has required that certain standards be met with regard to driver’s licenses and ID cards. For individuals residing in states that have not met those standards, an alternate form of ID is necessary for travel.

As of January 2018, if your state has not met the REAL ID requirements, you will be required to show additional identification at the TSA checkpoint. There is a list of alternative forms of identification available, but for U.S. citizens, a passport, military ID, transportation workers identification card or Merchant Mariner Credential are your primary options.

On October 1, 202, all air travelers must have a license compliant with REAL ID requirements, or an acceptable alternative.  If your passport has been revoked or suspended, that could mean the end of your air travel until your tax debt is paid off.

If you have questions about your tax issues, contact the tax collection law specialists at Brunoro Law, APC.

Posted in: Tax Planning, Uncategorized

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