Understanding The IRS Collection Process And Legal Notices
Can the IRS revoke my passport?
December 19, 2023
Tax collection has been a longstanding obstacle for most third-world countries in achieving economic stability and generating revenue. However, the Internal Revenue Service (IRS) is known for its strict measures and ruthlessness. They don’t take any prisoners and if you are caught in their crosshairs, you better do as they say. To ensure compliance with tax laws, the government-led organization has significant powers; including revoking your passport.
If you are planning a trip abroad, make sure to not be certified for seriously delinquent tax debts by the IRS.
Let's break down the concept of seriously delinquent tax debt.
Recently, the IRS increased the federal tax debt exceeding $59,000 from $54000, including interest and penalties. Therefore, if you have debt exceeding the threshold amount, you might have to cancel your vacation trip if the IRS has reported your account as a serious delinquent to the state department. Are there any other instances where the IRS won’t certify taxpayers with seriously delinquent tax debt? Yes, let’s take a look at what scenarios can keep you out of the IRS’s claws. Anyone who:
- Has an account that’s been determined to be “currently not collectible” due to hardship,
- Has pending request for an Installment Agreement,
- Offer in Compromise,
- Has been identified as a victim of tax-related identity theft,
- Is in bankruptcy,
- Is located within a federally declared disaster area, or
- Has an IRS-accepted adjustment that will fully satisfy their tax debt.
Is my passport in jeopardy even if I am bankrupt?
The simple answer is no. We should know that not all debts are included in seriously delinquent tax debts. Similarly, not everyone with a tax debt will face passport revocation. For instance, if you are in the process of paying off the debt through an approved installment agreement with the IRS or filed for bankruptcy your passport may not be in jeopardy. Now let’s go through some of the instances where you won’t find the IRS sniffing around.
As we can deduce from the table, there are plenty of occasions where the IRS will not intervene. There are legal ways to reduce your tax liability instead of evading it altogether and inviting trouble upon yourself. Feel free to contact Lifeback Tax Relief to discuss your tax situation and how can we ensure that the IRS never knocks on your door!
Seriously delinquent tax debts do not include: |
Seriously delinquent tax debts include: |
| Debts being timely paid through IRS-approved installment agreements, | U.S. individual income taxes |
| Child support | Trust Fund Recovery Penalties |
| Settlement agreements entered into with the Department of Justice | Business taxes for which taxpayers are personally liable for |
| Debts being timely paid with an Offer in Compromise accepted by the IRS, | Other civil penalties |
| Debts for which a Collection Due Process Hearing regarding a levy to collect the debt has been timely requested. or Those suspended because of a request for innocent spouse relief. |
Your passport is not revoked overnight
Also, the IRS does not deny, limit, or revoke your passport immediately. There are several steps involved before any decision is made. First of all, the IRS will issue a Notice of Intent to Levy and a Notice of Your Right to a Hearing. It is deemed as a warning for taxpayers to address their tax liabilities as soon as possible before any strict actions are taken. If you are served with this notice, you would want to hire a Certified Tax Resolution Specialist (CTRS) and try to resolve any tax debts or come to an agreement with the relevant authorities.
Making your case for tax debt resolution has many challenges. Tax debts are complex and require expert help to get out of them. Make sure you hire the right person, and if you are having issues finding the right team, Lifeback Tax Relief is here to reduce your tax liabilities and get you out of the mess.
Moving on, if the issue persists, the IRS will share relevant information with the U.S. Department of State. And that is when drastic measures can be expected. The State Department has the authority to deny, revoke, or limit your passport. If they do so, this action can affect your ability to travel internationally, and you may find yourself on an exit control list (ECL) until the tax issues are resolved. Moreover, it adds to your tax history and you might get on the IRS’s radar for the smallest inconvenience that arises in the future.
It is not too late to have an expert opinion
While getting your passport revoked is not a pleasing thought, it does not necessarily occur in every case. Taking proactive measures regarding your tax debt can keep you out of trouble and save resources at the same time. Furthermore, hiring tax consultants to monitor your tax situations timely is the best way to steer clear of any interaction with the IRS and other financial institutions. We understand that unexpected situations do arise – if you already have been served with a notice, our services promise to help you achieve a successful agreement with the IRS.
We can thoroughly evaluate your financial situation and come up with viable solutions. Also, our experts can determine whether you are eligible for an Offer in Compromise. If you are, you might not have to pay even the full amount of debt, how does that sound? It is not guaranteed and involves a complete analysis of your financial situation, but thousands of taxpayers have benefitted from it in the past.
Not complying with the agreement
Once you come to an arrangement with the IRS, it is imperative to adhere to its rules and regulations. You are off the hook for now, but if you break the terms then there are much more severe penalties that can be imposed than the IRS revoking your passport. In some cases, taxpayers have even gone to prison for not complying with the deal they accepted. Therefore there is no room for negligence, it is essential to fulfill the terms and get out of it safely.
Tags :
Bankrupt, Certified Tax Resolution Specialist, Internal Revenue Service, LifeBack Tax Relief
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