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Back taxes: Checking passport validity

Much has been written about the newest IRS collections tool: passport denial and revocation. Passport applications are not yet being actively denied or revoked based on past due tax debt. The IRS did start certifying tax debts to the State Department in March, however.

What do you need to know if you are travelling? Passports are issued for five year to those under age 16. For adults, a passport is good for 10 years. If you have had your passport for some time, you may not question its validity.

What amount of tax debt could trigger revocation?

The first thing to realize is that $7,500 of back tax debt is not going to trigger IRS and State Department action. This regulation is design to address seriously delinquent tax debt. The threshold is $50,000 which includes interest and penalties. This amount will be indexed for inflation and could increase in the future.

How to protect your passport for upcoming international travel

You’ve been dreaming about returning to Italy for 20 years and finally have a trip on your calendar this summer. Or maybe business requires you to travel internationally several times a year, your valid passport is a requirement.

In these cases, you can take proactive measures. When several years of tax troubles have resulted in tax debt that could cause issues, here are two options.

  • First, you could pay down the existing tax bill to under the $50,000 threshold. If you owe $54,250, this might be an easy way to stay off the IRS radar.
  • Second, enter an installment agreement and stay current on the payments. Streamlined processing criteria was expanded as part of a pilot to allow individuals assessed up to $100,000 to enter repayment plans out to 7 years (84 monthly payments).

Ignoring correspondence from the IRS will not make mounting tax debts go away. The Service has new collection tactics at its disposal and is no longer limited to liens, levies and garnishment. Before anything happens to your passport, speak with an experienced tax attorney to find a resolution.

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