Tim’s Tax News on the Tenth – February 2018

INTERNATIONAL TRAVELERS MAY LOSE PASSPORT PRIVILEGES IF THEY OWE BACK TAXES OF MORE THAN $51,000

The IRS recently announced that it strongly encourages taxpayers who are seriously behind on their taxes to pay what they owe or enter into a payment agreement with the IRS to avoid putting their passports in jeopardy. In 2018, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts.” These new procedures implement provisions of the Fixing America’s Surface Transportation (“FAST”) Act, signed into law in December 2015. The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt. The FAST Act requires the State Department to deny their passport application or deny renewal of their passport. In some cases, the State Department may even revoke their passport.

Taxpayers affected by this law are those with a seriously delinquent tax debt. A taxpayer with a seriously delinquent tax debt is generally someone who owes the IRS more than $51,000 in back taxes, penalties and interest for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired.

There are several ways taxpayers can avoid having the IRS notify the State Department of their seriously delinquent tax debt. They include the following:

  • Paying the tax debt in full 
  • Paying the tax debt timely under an approved installment agreement
  • Paying the tax debt timely under an accepted offer in compromise
  • Paying the tax debt timely under the terms of a settlement agreement with the Department of Justice
  • Having requested or have a pending collection due process appeal with a levy
  • Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief

A passport will not be at risk under this program for any taxpayer:

  • Who is in bankruptcy 
  • Who is identified by the IRS as a victim of tax-related identity theft 
  • Whose account the IRS has determined is currently not collectible due to hardship 
  • Who is located within a federally declared disaster area 
  • Who has a request pending with the IRS for an installment agreement 
  • Who has a pending offer in compromise with the IRS 
  • Who has an IRS accepted adjustment that will satisfy the debt in full

For taxpayers serving in a combat zone who owe a seriously delinquent tax debt, the IRS postpones notifying the State Department and the individual’s passport is not subject to denial during this time.

 

Our office has been successful in helping taxpayers with IRS and IDOR collection problems for over 26 years. If you have a tax or debt problem, please contact me at (847) 705-9698 or thughes@lavellelaw.com and find out how we can help you. Above all, if you are unable to pay your tax bill, do not wait to call us. There are many programs designed to help taxpayers who are having trouble paying their tax bills. Because interest and penalties on unpaid taxes can add up very quickly, it is better to call our office sooner rather than later for help.

Lavelle Law, Ltd. is registered with the Illinois Department of Financial and Professional Regulation as an approved continuing education provider for CPE for CPAs and Enrolled Agents. If your organization is seeking CPE courses in the area of Business Law, Innocent Spouse Relief, IRS Collections, Tax Scams (including ID Theft) or other areas in tax law that can be taught at your office, please contact me at thughes@lavellelaw.com.

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