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Posted: May 18, 2019

Your United States Passport and Your Tax Debt

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If you owe the federal government more than $52,000.00 in tax obligations, it can certify your debt as a “Seriously Delinquent Tax Debt.”  A Seriously Delinquent Tax Debt is any unpaid, legally enforceable federal tax debt totaling more than $52,000.00 for which a notice of tax lien has been filed and the taxpayer has either exhausted his or her administrative remedies or the time to file an administrative challenge has lapsed, or a notice of levy has been filed.  The $52,000.00 threshold is adjusted annually for inflation.

Tax debt is not considered Seriously Delinquent Tax Debt if you are paying it by an IRS-approved installment agreement, if the debt is being satisfied by an Offer in Compromise entered into with the IRS or a Settlement Agreement entered into with the Justice Department, if the taxpayer has timely requested a collections due process hearing with respect to a levy initiated by the IRS, or if collections has been suspended because the taxpayer requested innocent spouse relief pursuant to section 6015 of the Internal Revenue Code.  A taxpayer’s passport will not be at risk if the taxpayer is in bankruptcy, if the taxpayer is the victim of tax-related identity theft, if the taxpayer’s debt is not collectible due to hardship, if the taxpayer is located in a federally-declared disaster area, if the taxpayer has a request pending for either an installment agreement or an offer in compromise, or if the IRS has accepted an adjustment to fully satisfy the tax debt.

If the IRS certifies a taxpayer’s debt as a Seriously Delinquent Tax Debt to the Department of State, it is required to notify the taxpayer that it did so.  The IRS satisfies this requirement by sending the taxpayer a Notice CP 508C.  If the IRS decertifies a taxpayer’s debt as a Seriously Delinquent Tax Debt, it notifies the taxpayer that it has done so by sending the taxpayer a Notice CP 508R.  The IRS will decertify a taxpayer’s obligations as a Seriously Delinquent Tax Debt if the taxpayer fully satisfies his or her tax debt or the tax debt becomes legally unenforceable, the debt is no longer seriously delinquent, or the original certification was made in error.  The IRS will decertify the tax debt as seriously delinquent if the taxpayer enters into an installment agreement, an offer in compromise, or a settlement agreement, the taxpayer has filed for innocent spouse relief, or the taxpayer has timely filed for a collections due process hearing regarding a levy action.  Under certain circumstances, the taxpayer may seek court review of the IRS’s certification of his or her tax debt as a Seriously Delinquent Tax Debt.

If you would like more information regarding your tax debt and its effect on your United States passport, you can review irs.gov/passports, or call me at 917-817-9001 or e-mail me at scott@fenstermakerlaw.com.  This blog posting is not designed to provide you or anyone else with legal advice.  If you would like legal advice, please contact me or your attorney.

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