Summer is prime time for Americans to travel internationally. From May through September 2017, over 1.6 million U.S. citizens per month traveled outside the country.

A good percentage of these travelers just may have hit just a snag.

Got a Big Tax Debt? No Passport for You

There are over 362,000 Americans with overdue tax debts large enough to be denied passports according to the IRS and as reported recently in the Wall Street Journal.

Are You One of Them?

In late 2015, Congress passed a law requiring that the IRS must revoke or deny passports to those who owe $51,000 or more in back taxes, penalties, and interest. Enforcement of the law began just a few months ago, in February.

Not everyone who owes that amount will be denied a passport (or renewal of one), however.

You must be subject to a tax lien or levy in order for your passport to be revoked or denied.

There are some exceptions, of course. Your passport will not be denied or revoked if:

• A portion of your tax debt includes FBar penalties (assessed for failure to report foreign financial accounts) and, excluding that amount, you owe less than $51,000
• You are contesting an IRS assessment (either through administrative channels or tax court)
• The IRS is currently considering your installment payment agreement or offer in compromise
• You have a current installment payment plan in place
• You have an approved offer in compromise
• You have been the victim of identity theft
• You have requested innocent spouse relief
• Your tax debt is currently in “non-collectible” status for economic hardship
• You are in bankruptcy
• You are serving in a combat zone or area
• You are in a federally declared disaster area

As well, you could be issued a passport for emergencies or humanitarian reasons.

How Do I Know If I’m on the List?

Currently, the IRS is in the process of sending names of those who fall into the parameters of the law to the State Department. The IRS is aiming to have this completed by December 31.

If your name is on the list, you’ll be notified about the same time as your information is sent to the State Department.

The program is in no danger of going away. In fact, it has been working well.

As of late June, over $11.5 million has been paid by 220 people to settle their debt in full. One person paid $1 million to prevent passport denial. On top of this, 1,400 installments have been approved, according to a spokesman for the IRS and reported in the Wall Street Journal.  

What Should I Do if I’m on the List?

Don’t wait until you’re facing a passport denial.

If you have a big tax debt, the sooner you deal with it, the better.

Call an experienced Enrolled Agent to help you with getting back into good standing with the IRS for the least amount possible.

It’s more than worth it in time and money. Trying to go it alone without in-depth knowledge of tax law, how the IRS works, and the many options available to you, can cost you both.

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Jeffrey Schneider, EA, CTRS, NTPI Fellow has the knowledge and expertise to help you reach a favorable outcome with the IRS. He is the head honcho at SFS Tax & Accounting Services as well as the Enrolled Agent and Certified Tax Resolution Specialist for SFS Tax Problem Solutions.
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Now What? I Got A Tax Notice From The IRS. Help! Defining and deconstructing the scary and confusing letters that land in your mailbox. Jeff defines and deconstructs the scary and confusing letters in a fashion that mixes attention to detail with humor and an intricate clarification of what is what in the world of the IRS.

The book is available in paperback and ebook on https://Amazon.com
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For more on SFS Tax Problem Solutions, visit http://sfstaxproblemsolutions.com/
For more on SFS Tax & Accounting Services, visit http://sfstaxacct.com/
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Phone: 772-337-1040
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