There are many financial penalties to not paying one’s taxes in a timely manner, but many Texas residents may not know that the Internal Revenue Service can notify the State Department when someone owes a seriously delinquent tax debt. This means that the State Department can deny someone’s application for a passport and can even revoke an existing passport.
The Fixing America’s Surface Transportation Act became law at the end of 2015. It gives the State Department the power to take passports away from certain individuals. A seriously delinquent tax debt is defined as one that is unpaid, legally enforceable federal tax liability that is more than $50,000. This amount includes interest and penalties and is also adjusted annually for inflation.
When such a notification is made to the State Department, the IRS also sends a notice to the delinquent taxpayer, including steps on how to rectify the situation. It can help them create payment plans so the individual can begin making installments to resolve their debt. The IRS is not supposed to report taxes that are being paid off in installment agreements, and also does not report ones that are in offers of Compromise.
Getting off the list would require proving that one’s debt is fully paid or is not seriously delinquent. There are also ways to have the IRS expedite processing times in case someone has to travel urgently. Most importantly, there are ways to negotiate payment installment plans with the IRS, should certain criteria be met. It might be helpful to consult an attorney experienced in IRS tax law for guidance on how to proceed.