There are many consequences we can face if we fail to file our taxes or pay our due balance. These consequences can come in the form of interests and fines, for example. However, another consequence that can come as a result of a serious tax debt is the revocation or denial of our passport. Even when this has been in the books for some time, the IRS has been trying to inform and educate taxpayers about the possibility.
Facing the revocation or denial of our passport isn’t a very common situation. This could only happen when we accrue a seriously delinquent tax debt. Nevertheless, there are different payment plans and programs we can look for. Their plans could help us manage our tax debt better. Besides, there are other options available that can help us out, too.
Whenever we find ourselves with seriously delinquent tax debt, the IRS can revoke or deny a passport request. However, we must keep in mind they are not directly in charge of doing so. What happens is that the IRS notifies the State Department of such a debt. Then, the State Department is responsible for the revocation or denial of a passport.
This is not a very common scenario, though. The tax debt must be of more than $52,000 in order for it to be considered a seriously delinquent tax debt. This balance includes penalties and interests, of course. IF such was the case, the IRS should notify any taxpayer by sending the notice CP508C.
The IRS offers many different payment programs and plans that can help us pay off any serious tax debt. Frequently, though. Most taxpayers qualify for either a payment agreement or an offer in compromise. If we request a payment agreement, we can divide our balance into installments to cover every month.
However, there are some taxpayers that might qualify for an offer in compromise. This means that we could reach an agreement between the IRS and ourselves in order to cover any serious tax pay. The advantage of an offer in compromise is that we can settle a liability for an amount below the current tax amount we owe.
If we cannot qualify for a payment arrangement or an offer in compromise, there are still other options out there. For example, the IRS cannot certify any taxpayers as seriously delinquent if the taxpayer has filed for bankruptcy. If you suffered from identity theft or are currently going through a financial hardship, such tax debt doesn’t count, either.
Negotiating an installment with the IRS could be an option, even when we don’t qualify for an actual payment program. This way, we can reduce the debt and keep it from becoming seriously delinquent. Becoming a permanent resident of a foreign country could be another way to avoid falling such a debt status.
Regardless of the situation, always remember to consult with a tax professional. They will be able to provide you with the required assistance and guidance in this kind of problems with the IRS.