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A Reprieve From Revocation Of Passport When You Owe Taxes!



Manasa Nadig

I have been fortunate the past couple of years to have been able to travel. I find that as I check off places on my bucket list, I keep adding on to it! I have been bitten by the travel bug! We recently went to Munich, Germany and climbed 14 stories to the top of The Kirche of St. Peter. The climb through the narrow stairway was somewhat crowded and tight at times but it was absolutely worth it! The views at the top were breath-taking.

Of course when you travel, you need your passport. What happens when you owe taxes to the Government, can they revoke your passport? If you remember, back in 2015, there was a Law passed called the FAST Act. The Act was mostly about transportation but they got in a clause that if you owed more than $50,000 in taxes, the Government could revoke your existing passport or deny you a new passport.

Under Section 32101 of the FAST Act, if the IRS certifies a taxpayer as having a ‘seriously delinquent tax debt”, which is: (1) Owing $52,000 or more in taxes and (2) Meeting certain other requirements under IRC §7345(b), the State Department must deny the taxpayer’s original or renewal passport application and may revoke or limit an existing passport.

Taxpayer Advocate Services {TAS} had been advocating on behalf of those who had been working with them before being thus certified by the IRS. TAS wanted the IRS to exclude from their lists those taxpayers who were working to determine their tax liability; or were seeking penalty abatements based on reasonable cause; or were seeking audit reconsideration. TAS felt that the taxpayers would be pressured into agreements with the IRS to avoid certification.

The IRS recently agreed to temporarily exclude taxpayers with open TAS cases from certification and to reverse certifications for TAS who were certified before coming to the TAS. The acting National Taxpayer Advocate, Bridget T. Roberts recently said in her blog that she thinks “this is a change in the right direction that protects taxpayers who are working with TAS to resolve their liabilities from the severe consequences of passport denials and consequences”.

Obviously, the TAS wants taxpayers to work with them in good faith or they cannot recommend this exclusion.

The Internal Revenue Service is going to be hard pressed to put the certification process into action. According to Ms. Roberts’ blog post on the IRS’ website, the IRS recently implemented a program to recommend revocation of passports in certain cases, however the standards in the Internal Revenue Manual for making these determinations are vague and the IRS may come across as making arbitrary decisions. Also, the technology at the disposal of the IRS is apparently preventing them from sending out certification and decertification notices.

What does this mean for you if you have tax debts that are $52,000 or more? If you would like to arrange for a payment plan with the Internal Revenue Service or request penalty abatement for reasonable cause, work with the Taxpayer Advocate Service. How does one get in touch with the Taxpayer Advocate Service? Well, get in touch with a Tax Professional/ Enrolled Agent who knows how, find out if you qualify and take advantage of the reprieve offered by the IRS thanks to the Taxpayer Advocate Service!

Bibliography: Internal Revenue Code IRS §7345 (b); FAST Act; IRS News.

Have a question? Contact Manasa Nadig

 

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I am Manasa Nadig, enrolled to practice and represent taxpayers with the Internal Revenue Service. I have been in the business of Tax Preparation & Tax Planning since 1999. My firm, MN Tax Solutions, LLC is based in Michigan, USA. Please connect with me on TaxConnections for more information about myself & the services provided by my firm.

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One thought on “A Reprieve From Revocation Of Passport When You Owe Taxes!

  1. Avatar Keith REDMOND says:

    Please note that this is another example why it is best to not enter or re-enter the US tax system as an American overseas. Accidental Americans are not to enter the US tax system full stop. As an American overseas in the US tax system, one can have serious problems.

    Keith REDMOND
    American Overseas Advocate

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