Many people worry about getting a passport when they owe money to the IRS. This is a common concern for travelers who want to explore the world but have tax debt hanging over their heads.
You can still get a passport even if you owe money to the IRS, as long as your tax debt is less than $55,000. The government only denies passports to those with seriously delinquent tax debt above this threshold.
If your tax debt is under $55,000, you can apply for a passport without issues. But it’s wise to start addressing your IRS debt to avoid future problems. Setting up a payment plan or exploring other options can help you manage your tax obligations while still being able to travel internationally.
Understanding IRS Debt and Passport Eligibility
IRS debt can affect your ability to get a passport. The government has rules about this. Let’s look at how tax debt impacts passport applications and the law behind it.
The Impact of IRS Debt on Passport Applications
If you owe a lot in taxes, it might stop you from getting a passport. The IRS tells the State Department about big tax debts. This can lead to:
- Denial of a new passport
- Not being able to renew your passport
- Having your current passport revoked
The tax debt limit is $55,000 or more. This amount changes each year due to inflation. If you owe less, your passport is usually safe.
The IRS sends warning letters before taking action. You can avoid problems by paying your debt or setting up a payment plan.
Legal Framework: The FAST Act Explained
The FAST Act became law in 2015. It lets the government deny passports to people with big tax debts. Key points of this law are:
- It applies to “seriously delinquent” tax debts
- The IRS must tell the State Department about these debts
- There are some exceptions to the rule
Exceptions include:
- People pay their debt on time through an agreement
- Those facing financial hardship
- Victims of identity theft
The law aims to make people pay their taxes. It’s been effective in collecting millions in unpaid taxes since it started.
Navigating the Passport Application Process with IRS Debt
Dealing with IRS debt can make getting a passport more complex. The process requires careful planning and communication with the IRS. Specific steps can help applicants move forward despite tax issues.
Steps to Take Before Applying for a Passport
Contact the IRS to discuss your tax debt. Ask about payment plans or offers in compromise. These options may help resolve the debt.
Check if you qualify for an exception. Some situations allow passport approval even with tax debt. These include:
- Proving financial hardship
- Needing to travel for work
- Having to leave the country for family emergencies
Get your tax situation in writing from the IRS. This document can be helpful during the passport application process.
What to Expect During the Application Process
Be honest on your passport application. Don’t try to hide your tax debt. The State Department will check with the IRS.
Prepare for possible delays. The IRS may need to confirm your status. This can slow down the usual processing time.
Bring proof of any payment plans or agreements with the IRS. These documents can support your application.
You might need to pay extra fees. Rush processing could be necessary if you have upcoming travel plans.
Stay in touch with both the IRS and the State Department. Regular updates can help move your application along.
Addressing IRS Debt to Secure a Passport
Taxpayers with IRS debt can take steps to resolve the issue and obtain a passport. Two main options are available: setting up a payment plan or disputing the debt claims.
Setting up a Payment Plan with the IRS
The IRS offers payment plans for those who can’t pay their tax debt in full. These plans let taxpayers make smaller, regular payments over time.
Short-term plans last 180 days or less. Long-term plans extend beyond 180 days. To apply, taxpayers can use the IRS website, phone, or mail.
Fees vary based on the plan type and payment method. Some low-income taxpayers may qualify for reduced or waived fees.
Once approved, taxpayers must stick to the plan terms. This includes making all required payments on time.
Disputing IRS Debt Claims
Sometimes, the IRS may make errors in tax debt calculations. Taxpayers have the right to challenge these claims.
To dispute a debt, gather all relevant documents. This includes tax returns, payment records, and any IRS notices.
Contact the IRS by phone or mail to explain the situation. Be clear about why you think the debt is incorrect.
If needed, seek help from a tax professional. They can guide you through the dispute process.
The IRS will review your case and make a decision. If they agree with you, they’ll adjust or remove the debt.
Special Considerations and Exceptions
Some situations may allow passport issuance despite IRS debt. Emergencies and bankruptcy can affect passport eligibility in certain cases.
Emergency Travel and Humanitarian Exceptions
The State Department may grant passports for emergency travel, even with tax debt. This includes life-or-death situations involving immediate family members. Examples are:
- Serious illnesses
- Injuries
- Deaths
Proof of the emergency is needed. A letter from a hospital or foreign authorities may be required. These passports are often limited in validity, usually for one trip only.
Humanitarian reasons can also lead to exceptions. This might include:
- Adopting a child overseas
- Receiving urgent medical treatment abroad
Each case is reviewed individually. The State Department decides if the situation warrants an exception.
Impact of Bankruptcy on Passport Eligibility
Filing for bankruptcy can affect passport eligibility for those with tax debt. Chapter 7 or Chapter 13 bankruptcy may pause IRS collection efforts. This includes the passport revocation process.
During bankruptcy proceedings, the IRS might not be able to certify the tax debt. This could allow for passport issuance or renewal. But it’s not a guarantee.
After bankruptcy, the situation can change. If the tax debt isn’t discharged, the IRS may restart collection efforts. This could again put passport rights at risk.
It’s important to work with a bankruptcy lawyer. They can explain how filing might affect passport eligibility.
Frequently Asked Questions
Many people have questions about how IRS debt impacts getting a passport. Here are some key things to know about passports and tax debt.
How can an individual ascertain if they are on the passport denial list due to IRS debt?
The IRS sends a Notice CP508C to taxpayers who have seriously delinquent tax debt. This notice tells them their passport application may be denied. People can also call the IRS or check their online account for this info.
What is the financial threshold of IRS debt that may lead to passport denial?
The current threshold for seriously delinquent tax debt is $55,000. This amount includes penalties and interest. The IRS adjusts this number yearly for inflation.
Does being in debt to the IRS automatically prevent one from acquiring a U.S. passport?
No, owing money to the IRS doesn’t automatically stop someone from getting a passport. Only seriously delinquent tax debt can lead to passport denial. The debt must meet certain criteria set by law.
What defines seriously delinquent tax debt in the context of passport issuance?
Seriously delinquent tax debt is over $55,000. The IRS must have filed a tax lien or issued a levy. The taxpayer must not be making payments through an approved installment agreement or offer in compromise.
Can outstanding state taxes influence the ability to obtain a U.S. passport?
State taxes don’t affect U.S. passport applications. Only federal tax debt can lead to passport denial. Each state has its own rules about state-issued IDs and unpaid taxes.
Are there ways to get a U.S. passport if you have certain types of debt?
Yes, people with some types of debt can still get a passport. Student loans, credit card debt, and mortgages don’t affect passport applications. Only seriously delinquent federal tax debt can cause issues with getting a passport.