If you’re planning to travel overseas, it’s essential to have all the necessary documentation sorted out. One crucial document you’ll need is your passport. Whether you intend to travel or work abroad, applying for a passport a few months in advance is important. This is to ensure you have enough time to address any unexpected issues that might arise during passport processing. However, if you have an outstanding tax debt with the IRS, you might wonder, “Can I get a passport if I owe back taxes?’’. Well, it depends. Several factors can prevent you from obtaining or renewing your passport.
In this article, we will look at different circumstances that affect your ability to obtain a passport while owing taxes to the IRS.
Can The IRS Place a Hold on Your Passport If You Owe Back Taxes
Although passport issuance is under the jurisdiction of the State Department, the IRS can still wield some power over your ability to get or renew your passport. The IRS can put a hold on your passport application if you have a seriously delinquent tax debt. The IRS considers you ‘’seriously delinquent’’ if you have more than $59,000 (adjusted yearly for inflation) of unpaid taxes, including penalties and interests.
The agency will certify the tax debt and submit it to the State Department. The State can then refuse to issue or renew a passport. They can even revoke your current passport. Or, if you’re abroad, they can give you a limited-validity passport that will only allow you to return to the United States.
Notice of Certification of Your Seriously Delinquent Federal Tax Debt
If you owe over $59,000 in back taxes, the IRS will send you a notice called CP508C. This letter informs you that your debt was certified. At this point, you cannot obtain or renew your passport until you pay the tax you owe in full or make payment arrangements with the IRS.
It is important to remember, though, that the certification process does not happen overnight. The agency will typically send multiple notices and give you some time to respond before certifying your tax debt to the State Department.
Once your tax debt receives a certification, the state will hold your passport application for 90 days. This will give you time to settle your outstanding tax debt with the IRS.
If you fail to pay or arrange a payment plan within the 90 days allowance period, the State Department will proceed to deny and close your application.
Options for Resolving Tax Debt
If you owe taxes and wish to apply for a passport, the first step is to resolve your tax debt. You can do this by paying in full, either by sending a check or money order to the IRS. You can also make payments using the IRS website or mobile application.
On the other hand, if you cannot pay in full, you can enter into a payment arrangement with the IRS. The IRS offers various payment plan options, such as the following:
- Installment Agreement. This is an option if you owe taxes to the IRS but cannot pay your entire tax debt upfront. With this plan, you can make monthly payments until you fully pay your tax debt.
- Offer in Compromise. If paying your tax liability in full is causing financial hardship, an offer in compromise may be a viable option. With this option, you can settle your tax debt for less than the total amount owed.
- Currently Not Collectible. CNC is a status that the IRS may grant to taxpayers who cannot pay their tax debt due to financial hardship. Essentially, this means that the IRS temporarily stops its collection activities against the taxpayer.
Exceptions To IRS’s Tax Debt Certification
There are some scenarios in which the IRS will not notify the State Department of your tax debt, allowing you to apply for a passport. Below are certain debts that are not included as seriously delinquent tax debts:
- Child support
- Debts paid through an IRS-approved installment plan
- Debts paid through an accepted Offer in Compromise with the IRS
- Penalties related to the Report of Foreign Bank and Financial Account (FBAR)
- Settlement agreements made with the Department of Justice
- Debts for which a Collection Due Process Hearing regarding a levy has been requested
- Cases where innocent spouse relief has been requested
Additionally, the IRS will not certify your tax debt to the State if you’re undergoing bankruptcy proceedings or have been the victim of tax-related identity theft.
Reversal of Certification of Delinquent Tax Debt
The IRS will send you a Notice CP508R when it reverses its certification of your seriously delinquent tax debt. This will happen if you pay off your debt in full, your tax debt is no longer seriously delinquent, or the certification is erroneous. The IRS makes this reversal within 30 days and will notify the State Department as soon as possible.
Demonstrating a Valid Reason for Travel
If you need to travel for a valid reason, such as a business trip or medical treatment, you may be able to obtain a passport even if your tax debt received a certification from the IRS. However, you must provide the necessary documentation to support your request. For example, if you need to travel for medical reasons, you may need to provide a letter from your doctor stating that treatment is necessary and not available in the United States.
How to Get a Passport if You Owe Taxes to the IRS
If you find yourself stuck in a situation where your passport application is delayed or denied due to unpaid taxes, don’t worry. Our team of tax experts is here to help guide you through the complicated process of resolving your tax debt.
We understand that tax debt can be overwhelming and confusing. So, we’ll work with you to explore your options and find the best solution that fits your unique situation. With our help, you can negotiate better terms for paying off your debt and potentially reduce the overall amount you owe, including any additional penalties and interest.
Take the first step towards resolving your tax issues and getting your passport application approved. Contact us today to schedule your free consultation call.