Tag Archives: passport

Taxpayers with Significant Tax Debts Can Lose Their U.S. Passports

By Coleman Jackson, Attorney, Certified Public Accountant
August 21, 2019

 

Taxpayers with Significant Tax Debts Can Lose Their U.S. Passports

 

Ever heard of the Fixing America’s Surface Transportation (FAST) Act of 2015?  Well, under FAST the IRS has the authority to notify the State Department of taxpayers certified as owing the federal government.  A significant tax debt is currently defined as a delinquent tax bill of $52,000 or moreThe FAST requires the State Department to revoke the delinquent taxpayer’s U.S. passport and limit the taxpayer’s ability to travel outside the United States.

 

Taxpayer’s who intend to travel outside the United States must negotiate with the IRS to get the delinquent tax certification lifted

 

Taxpayer’s who intend to travel outside the United States must negotiate with the IRS to get the delinquent tax certification lifted.  Until that happens the taxpayer could become stranded outside of the U.S. with a revoked passport, or be blocked receiving a passport for the first time or on renewal leaving them unable to travel out of the country for any reason.

 

taxpayers who have to travel abroad must responsibility deal with their federal tax obligations long before they need to travel; because other than option one, above (paying the tax debt in full), the suggested options take months and some of them even take years to resolve in negotiations with the IRS

 

The IRS has identified several ways taxpayers can avoid having the IRS notify the State Department of their seriously delinquent tax debt as follows:

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

The practical tiptaxpayers who have to travel abroad must responsibility deal with their federal tax obligations long before they need to travel;  because other than option one, above (paying the tax debt in full),  the suggested options take months and some of them even take years to resolve in negotiations with the IRS.

The following types of taxpayers have been exempted from the delinquent taxpayer certification requirements under FAST:

  • Taxpayers in bankruptcy proceedings;
  • Identity Theft Victims;
  • Taxpayers whom the IRS has deemed non-collectible;
  • Taxpayers located within a federal declared disaster area;
  • Taxpayers with pending Installment Agreement request;
  • Taxpayers with pending Offer in Compromise with the IRS; or
  • Taxpayers with an IRS accepted adjustment that will satisfy the debt in full; and
  • Taxpayer’s serving in a combat zone is not exempt from the certification rules, but the certification is postponed while they do their tour of duty in the combat zone.

 

Taxpayers with plans to travel abroad simply need to be aware of the fact that their plans can be totally upended if they owe the federal government more$52,000 or more in back taxes.

 

Taxpayers with plans to travel abroad simply need to be aware of the fact that their plans can be totally upended if they owe the federal government $52,000 or more in back taxes.  The $52,000 could be owed on personal income taxes or business taxes where the individual taxpayer has been found be to be a responsible party, such as in payroll taxes with respect to the trust fund penalty that usually applies to delinquent taxpayer who owns the business or even employees of the business responsible for deciding what vendors and suppliers get paid and when.  Also the $52,000 certification threshold can be reached for a single tax period or multiple tax periods combined.  Example No 1, the taxpayer owes the IRS $2,000 for 2009, $14, 000 for 2015, and $40,000 for 2018.  In this example the taxpayer is seriously delinquent and the IRS under FAST can certify them as seriously delinquent to the U.S. State Department.  Example No. 2, the taxpayer owns a windmill manufacturing company with twenty employees; their business slowed to a whisper in the third quarter 2019 and the business owner decided to pay office rent, utilities, employees and suppliers and not the IRS payroll taxes.  The IRS learns of this decision and finds the owner the responsible party under the germane tax section and access a $52,000 trust fund penalty on the owner.  In this case, the owner/taxpayer could be certified by the IRS as a seriously delinquent taxpayer under FAST.  The owner’s passport could be revoked or their passport renewal could be denied by the U.S. State Department.

 

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432

Civil Action by Taxpayer in Denial or Revocation of United States Passport Cases

By Coleman Jackson, Attorney, Certified Public Accountant
January 08, 2019

 

Civil Action by Taxpayer in Denial or Revocation of United States Passport Cases

The United States Congress has authorized the denial or revocation of United States passports to taxpayers with seriously delinquent tax debt.  This authorization is codified in Internal Revenue Code Section 7345 and is pursuant to section 32101 of the FAST Act (the “Fixing America’s Surface Transportation Act”), which became law in the United States on December 14, 2015.  Seriously delinquent tax debt means an unpaid, legally enforceable federal tax debt of an individual totaling more than $50,000 that has been assessed and for which a Notice of Federal Tax Lien has been filed and all administrative remedies under Internal Revenue Code Section 6320 has lapsed or been exhausted, or where a federal tax levy has been issued.  The IRS is required under law to issue a Notice of Intent to Levy before issuing a federal tax levy.  These notices informs taxpayers that they could be certified as seriously delinquent taxpayers; and they might be the only notices received that alert taxpayers that their U.S. passport is in danger or being denied or revoked.

 

Seriously delinquent taxpayer

Any seriously delinquent taxpayer who is liable for a tax debt, which includes taxes, penalties and interest, in excess of $50,000 and has not entered into an installment agreement or made other arrangements with the IRS to resolve the tax obligation can have their United States Passport denied or revoked.  The IRS is authorized under U.S. Tax Law to certify to the U.S. State Department that the taxpayer’s tax debt is seriously delinquent.

 

The State Department may revoke the seriously delinquent taxpayer’s current passport preventing them from traveling outside of the United States

Once the U.S. State Department receives the IRS seriously delinquent taxpayer certification, the State Department will not issue or renew a passport.  The State Department may revoke the seriously delinquent taxpayer’s current passport preventing them from traveling outside of the United States.  If the revocation occurs while the taxpayer is abroad, the taxpayer could have difficulty reentering the Unites States at the port of entry because their U.S. Passport would no longer be valid.  Obviously taxpayers certified by the IRS as seriously delinquent can have their lives turned up-side-down with little or no advance warning beyond IRS Notice CP504.

 

Seriously Delinquent Taxpayers only have a judicial remedy to challenge the IRS seriously delinquent taxpayer certification

Seriously Delinquent Taxpayers only have a judicial remedy to challenge the IRS seriously delinquent taxpayer certification.  Internal Revenue Code Section 7345(e) allows an aggrieved taxpayer to bring a civil action against the United States Government in the U.S. Tax Court or in the appropriate U.S. District Court to challenge the seriously delinquent taxpayer certification.

 

 

This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.

Coleman Jackson, P.C. | Taxation, Litigation, Immigration Law Firm | English (214) 599-0431 | Spanish (214) 599-0432

Fixing America’s Surface Transportation Act: Delinquent Taxpayers Can Now Lose Their U.S. Passport

By:  Coleman Jackson, Tax Lawyer
December 21, 2015

Fixing America’s Surface Transportation Act  (FAST Act)  - Delinquent Taxpayers Can Now Lose Their U.S. Passport

The Fixing America’s Surface Transportation Act (FAST Act) became U.S. law on December 7, 2015.  It deals with more than the repairs and upkeep of the nation’s roads, bridges and other surface transportation.  Taxpayers beware; the FAST Act is not just about transportation; so don’t let the title fool you!

Two sections of the FAST Act should be of interest to all U.S. taxpayers as follows:

  1. Section 32101 authorizes the U.S. Treasury or Internal Revenue Service to refer taxpayers with certain outstanding tax obligations to the U.S. Department of State for the purpose of revocation or denial of U.S. passports for certain unpaid taxes; and
     
  2. Section 32102 authorizes the U.S. Treasury or Internal Revenue Service to enter into one or more qualified tax collection contracts for the collection of all outstanding inactive tax receivables.  That mean private debt collectors could be hired to help the government collect unpaid taxes.

Without a valid U.S. Passport You can Face Many Troubles

Without a valid U.S. Passport, international travel would be pretty much impossible for a delinquent taxpayer. Unwelcomed calls from debt collectors attempting to collect unpaid taxes would not be an ideal tax holiday.  Taxpayer’s affected by these FAST Act tax provisions may be prohibited from traveling for pleasure, health reasons, emergency, family matters, business matters or any other reason; if such travel requires a U.S. passport.  If the intent of the FAST Act tax provisions is for taxpayers to prioritize getting their back taxes paid or making appropriate payment arrangements with the IRS for payment of unpaid taxes; the Tax Provisions in the Fixing America’s Surface Transportation Act is sure to get delinquent taxpayer’s attention.

This tax law blog is written by the Tax & Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader.  You should consult with legal counsel in your area with respect to any specific immigration, IRS tax problems and other income tax, gift tax, or estate tax issues or your particular set of circumstances impacting you, your family or business.

Coleman Jackson, P.C. | Immigration & Tax Law Firm | English (214) 599-0431| Spanish (214) 599-0432