The IRS initially communicates with taxpayers via form letter through the mail. Each of the forms has a different identification code. In the case of CP508c, the Service is notifying you that it has certified your tax debt to the State Department as seriously delinquent.
A provision tucked into the 2015 Fixing America’s Surface Transportation (FAST) Act gave the IRS authority to work with the State Department to develop rules and regulations for denying or revoking passports for taxpayers with seriously delinquent tax debt. In this post, we answer several common questions about the new IRS collection tool.
What amount of back taxes triggers certification?
The current figure used to determine if a taxpayer is seriously delinquent is $51,000. It encompasses penalties and interest, so an original tax debt of $42,000 that compounded over several years could surpass the $51,000 figure as penalties and interest add up. Based on inflation, this number might increase in 2019
Over the summer of 2018, the IRS started sending taxpayer names to the State Department and will complete the initial process by the end of the year.
Do I receive the CP508c before the IRS makes the certification to the State Department?
No, the notification is simultaneous. You will not receive time to resolve the issue before the State Department is notified. If timing of the certification coincides with your application for a passport renewal, you may be left without a passport.
After reversal of certification, how long will it take to get my passport?
Resolving the tax issue does not provide an immediate remedy.
The IRS reverses the certification within 30 days and then provides notification to the State Department. Working between two federal agencies there may be additional delay, so this does not necessarily mean you receive a new passport within 30 days.
If my passport is still valid, will this affect me?
Probably not immediately, you can still travel and use your valid passport. Currently, the State Department will only reject new or renewal passport applications for taxpayers on the list.
The 2015 legislation did give the agencies the authority to revoke passports. While evidence does not yet exist that the agency will start taking away valid passports, this could happen.
If you receive a CP508c, get honest and individualized legal advice from a tax attorney. Whether you believe the IRS made a mistake or you have been meaning to address mounting back taxes, this form letter is one to take seriously.