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IRS To Begin Using New 'Passport Confiscation' Powers

by Mike Godfrey, Tax-News.com, Washington

17 January 2018


The Internal Revenue Service has warned "seriously delinquent" taxpayers that they risk losing their passports if they fail to regularize their tax affairs.

This month, the IRS is to begin implementing 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 also requires the State Department to deny their passport application or deny renewal of their passport. In some cases, the State Department may revoke their passport.

A taxpayer with a seriously delinquent tax debt is generally someone who owes the IRS more than USD51,000 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, or the IRS has issued a levy.

"In general, taxpayers behind on their tax obligations should come forward and pay what they owe or enter into a payment plan with the IRS," said the agency in a January 16 statement.

Some taxpayers could also qualify for relief programs, such as an "offer in compromise" (an agreement to settle their liabilities for less than the full amount owed if they are in financial distress), the IRS said.

The passport "confiscation" powers do not apply to taxpayers who are in bankruptcy, those who have been the victim of tax-related identity theft, or those whose account the IRS has determined is not currently collectible due to hardship. In addition, they do not apply to those located within a federally declared disaster area, those who have a request pending with the IRS for an installment agreement, those with a pending offer in compromise with the IRS; or those who have an IRS accepted adjustment that will satisfy the debt in full.

TAGS: individuals | tax | interest | law | Internal Revenue Service (IRS) | agreements | United States | penalties | Tax

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