IRS to revoke passports for individuals with significant tax debts

Passport Revoked

The Internal Revenue Service today urged taxpayers to resolve their significant tax debts to avoid putting their passports in jeopardy. They should contact the IRS now to avoid delays in their travel plans later.

Under the Fixing America’s Surface Transportation (FAST) Act, the IRS notifies the State Department (State) of taxpayers certified as owing a seriously delinquent tax debt, which is currently $52,000 or more. The law then requires State to deny their passport application or renewal. If a taxpayer currently has a valid passport, State may revoke the passport or limit a taxpayer’s ability to travel outside the United States.

When the IRS certifies a taxpayer to State as owing a seriously delinquent tax debt, the taxpayer receives a Notice CP508C from the IRS. The notice explains what steps the taxpayer needs to take to resolve the debt. IRS telephone assistors can help taxpayers resolve the debt. For example, they can help taxpayers set up a payment plan or make them aware of other payment options. Taxpayers should not delay because some resolutions take longer than others.

Don’t Delay!
It’s especially important for taxpayers with imminent travel plans who have had their passport applications denied by State to call the IRS promptly. The IRS can help taxpayers resolve their tax issues and expedite reversal of their certification to State. When expedited, the IRS can generally shorten the 30 days processing time by 14 to 21 days. For expedited reversal of their certification, taxpayers will need to inform the IRS that they have travel scheduled within 45 days or that they live abroad.

For expedited treatment, taxpayers must provide the following documents to the IRS:

Proof of travel. This can be a flight itinerary, hotel reservation, cruise ticket, international car insurance or other document showing location and approximate date of travel or time-sensitive need for a passport.
Copy of letter from State denying their passport application or revoking their passport. State has sole authority to issue, limit, deny or revoke a passport.
The IRS may ask State to exercise its authority to revoke a taxpayer’s passport. For example, the IRS may recommend revocation if the IRS had reversed a taxpayer’s certification because of their promise to pay, and they failed to pay. The IRS may also ask State to revoke a passport if the taxpayer could use offshore activities or interests to resolve their debt but chooses not to.

Before contacting State about revoking a taxpayer’s passport, the IRS will send Letter 6152, Notice of Intent to Request U.S. Department of State Revoke Your Passport, to the taxpayer to let them know what the IRS intends to do and give them another opportunity to resolve their debts . Taxpayers must call the IRS within 30 days from the date of the letter. Generally, the IRS will not recommend revoking a taxpayer’s passport if the taxpayer is making a good-faith attempt to resolve their tax debts. Read More

Tax Reform 2018 Explained

Starting with Tax Year 2018 (Jan.-Dec. 2018), tax forms and schedules are changing due to Tax Reform. Tax Forms as we know them are being cut off and split up in schedules.

The House (again) approved the final version of the most sweeping rewrite of the tax code in more than 30 years. The tax bill previously passed the House — it was a 227-203 vote, no Democrats supported the bill — on Dec. 19. Then, the Senate passed the final version of the $1.5 trillion tax bill in the early hours of the morning Wednesday, Dec. 20. The vote was 51-48 along party lines.

Officially, the new name of the bill is “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018”, but it’s been called the Tax Cuts and Jobs Act since it was introduced back in November 2017. The Senate parliamentarian ruled the bill’s name and two other provisions — one that would have allowed parents to pay for homeschooling with money from 529 savings accounts and another that was part of criteria used to determine which colleges would qualify for a new excise tax — had to change else the bill would violate the budget rules Senate Republicans have to follow to pass their bill through a process that prevents Democrats from filibustering.

What’s changing— and what isn’t

  • 529 college savings plans
  • ACA individual mandate
  • Alimony
  • Alternative minimum tax
  • Bicycle commuting
  • Child tax credit
  • Corporate taxes
  • Estate taxes
  • Gains made on home sales
  • Medical expenses
  • Miscellaneous tax deductions
  • Mortgage and home equity loan interest deduction
  • Moving expenses
  • Pass-through businesses
  • Personal casualty or theft
  • Personal exemptions
  • Standard deductions
  • State and local tax (SALT) deduction
  • Student loan debt discharge
  • Tax brackets and income taxes