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Can the IRS revoke your passport?

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Thanks to the FAST act passed by congress in 2015, the IRS now has another tool to use to collect back taxes by revoking the passports of taxpayers with seriously delinquent tax debt. As of now, seriously delinquent tax debt must be at least 52,000 dollars and meet other criteria. If the IRS determines that a person has “seriously delinquent tax debt”, they can now notify the State Department who can then deny a passport application or renewal and can also revoke a current passport. Before notifying the state department, the IRS will send Notice CP508C to the taxpayer.

So, if you owe less than 52,000 you will not receive this notice. If you owe more than 52,000 but have made arrangements to pay your back taxes or are experiencing a financial hardship and are deemed to be “currently not collectible ” then you should not receive this notice. The moral of this story is that ignoring IRS collection letters can cause you to lose your passport. But, if you are working with them, you should not have this problem. Anyone receiving Notice CP508C who needs help dealing with this issue can contact a local tax professional such as an Enrolled Agent to review your options to resolve the matter as quickly as possible.

Fox Business Headline – Wrong!

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The headline reads “People Jailed for Owing Less Taxes than Al Sharpton”  That is absolutely false.  All of the people mentioned in the article were convicted and jailed for committing tax fraud, not for just owing taxes.  Unlike willful tax evasion, owing taxes is not a criminal offense.  The IRS has authority to do many things to a delinquent taxpayer such as, levying wages and bank accounts, or even seizing assets but they cannot send you to jail simply for owing taxes.  Mr. Sharpton once pleaded guilty to a misdemeanor charge for failing to file a state tax return, but he has not been convicted in court of tax evasion.

What if you receive a notice from the IRS that you owe back taxes?  You should never ignore such a notice because the longer you procrastinate in dealing with the issue, the more serious your consequences can become.  You should respond promptly to either dispute the liability or address it.  Enrolled Agents are licensed to represent taxpayers before the IRS in various matters including collections.  If you need help, they can be your advocate in reaching the best resolution to your tax problem.