07 Feb Owe The IRS? You Could Lose Your Passport.
Are you finally cashing in your vacation time to take a Euro trip? Well, if your travel plans include a passport and an airplane, then you need to be mindful about a new law that could prevent you from enjoying your time off from work, according to Forbes.
The FAST Act (Fixing America’s Surface Transportation) was implemented as a law on December 4, 2015. The purpose of the FAST Act was to create funding for highways, roads and other means of transportation. In this act, a new clause is implemented that allows the State Department to seize passports of “seriously delinquent” taxpayers. Because the IRS does not have the authority to seize passports, they must advise with the State Department about the taxpayers who have not paid their dues. Previously, the State Department had the authority to seize passports, but they did not have the authority to gain access to taxpayer information because of the breach of privacy laws.
The IRS has found a loophole to stop taxpayers from enjoying leisure time if they owe money to the government. Therefore, now the State Department has the ability to refuse to issue or renew passports for anyone who owes the government over $50,000, which includes any interest and penalties. Along with the State Department, the Secretary of the State is also allowed to invalidate a passport that has been already issued to a delinquent taxpayer. The amount for a “seriously delinquent” tax debt may change each year due to cost of living and inflation, however there are some exceptions to this law.
If you have settled an Installment Agreement or an Offer in Compromise, then this newly implemented law will not affect you. You are also in the safe zone if you are scheduled for a Collection Due Process hearing that has to do with a levy or an innocent spouse claim, where the tax debt has been suspended. Unfortunately, there is no grace period for the State Department to revoke an existing passport if you are a delinquent taxpayer. The IRS does however notify you when they list you as a “delinquent taxpayer” to the State Department. They then give you 90 days after seizing your passport to either make the payment, resolve any errors that were made or enter yourself into a payment plan.
It does not stop there! If you’re a taxpayer who is stuck in this situation and say to themselves, “Okay, I just won’t travel out of the country! Walla! Problem solved!” You are wrong! There is another law implemented called the REAL ID Act that prohibits federal agencies from accepting driver licenses or identification cards from taxpayers who have a debt travelling domestically. Well, this puts you in a sticky situation! Now you can’t even travel in state! This Act was implemented to encourage taxpayers to settle their debt before enjoying a vacation. After all, if you can pay for a vacation, then you should be able to pay your debts!
As of January 22, 2018 taxpayers who have a debt and are traveling with an identification card or drivers license must have another form of identification, usually a passport, which is acceptable for TSA (Transportation Security Administration). The only exception is if the state has extended the right to the traveler, otherwise all other travelers must have alternative proof of identification. In the upcoming years, the rules will be reinforced strictly and proficiently. In October 1, 2020 every traveler will need a REAL-ID compliant license to travel domestically. Alterative forms of identification such as passport will also be acceptable.
Why let the government dictate when or if you can take a trip, or enjoy time off with your loved ones. Filing your taxes accurately and on time is crucial for your credit, your freedom and your sanity. Go on that Euro trip and travel the world because you only have one life and you shouldn’t let the government prevent you from creating unforgettable memories.