Is your passport at risk because of tax debt?

On Behalf of | Aug 16, 2019 | Firm News

Falling behind on your taxes is not difficult. Each year, you complete your tax forms and find you owe even more than the year before. You may try adjusting your withholding as much as you can and still be able to pay your bills, but your debt to the IRS keeps growing. In fact, at some point, you may have even decided to put it out of your mind since you couldn’t possibly catch up.

Unfortunately, the IRS will not put it out of mind. For those whose overdue tax bill is more than $52,000, the government is ready to enact a new method of enforcing payment. If you are one of many in Connecticut who travel outside the country on a regular basis, you may want to reach out for help dealing with your tax debt before the U.S. State Department places travel restrictions on you.

The FAST Act

Last year, the IRS instituted a new law called Fixing American’s Surface Transportation Act. The terms of this law created a system between the IRS and the State Department, which is the government agency responsible for issuing passports to U.S. citizens. Through the FAST Act, the IRS began notifying the State Department of anyone who was $51,000 delinquent on income tax payments.

If anyone on that list applied for a new passport or tried to renew a passport that was about to expire, the State Department had the authority to deny those passports. Recently, the FAST Act entered a new phase, which includes the following details:

  • If you are more than $52,000 in debt to the IRS, the government can revoke your existing passport.
  • The State Department may have already sent you a letter warning you of the danger of losing your passport.
  • Your debt must be legally enforceable and will include any interest and penalties you may have already accumulated.
  • The IRS has already notified you that it has placed a lien or levy on your property and exhausted other methods of collecting the debt.

You are not alone if you are facing the loss of your passport due to unpaid tax debt. Over 400,000 taxpayers have received such warnings since the FAST Act went into effect.

Don’t delay seeking help

If you travel overseas for work or family obligations, there is a real danger that you will be unable to leave the country or, in the worst case, that the government will revoke your passport while you are overseas. You would be wise to seek legal assistance as soon as possible since you have only a short time to respond to the warnings that your passport is at risk because of unpaid tax debt.