Unpaid and unfiled tax returns always invite serious repercussions. According to the IRS, if the unpaid tax returns of a taxpayer are above $59,000 including interest and penalties, it is considered seriously delinquent tax debt and the IRS possesses the authority to ask the US State Department to deny, revoke or limit your passport until the dues are settled with the IRS. This is possible when a notice of federal tax lien or levy has already been issued to the taxpayer but he or she has failed to settle the dues. Continue reading to know what steps the IRS can take on unpaid and unfiled tax returns.
Certification to the state
When the IRS certifies delinquent tax debt to the State Department, they send you a Notice CP508C by regular mail at your last known address. In case the taxpayers with delinquent tax debt apply for a new passport or renewal, the State Department issues a denial letter and gives you 90 days to allow you to:
Pay the entire tax debt
Enter into a suitable payment agreement with the IRS
Contest mistakes in the certification
Reversal of certification
When the IRS considers reversing the certification, it will send you Notice CP508R. The IRS takes a reversal decision within 30 days and informs the State Department of the same. Situations, where IRS agrees to reverse the certification, are:
The tax debt is paid in full or is no longer collectible under the law.
The tax debt is no longer considered seriously delinquent.
There is a mistake in the certification or the certification is found to be invalid.
Keep in mind, the 30-day window is only possible in cases of unpaid or back taxes. In cases of unfiled tax returns, the reversal may take longer.
Referral to revoke a passport
The IRS has the authority to ask the State Department to revoke your passport. This generally happens in situations where you had promised the IRS to settle your dues and unfiled tax returns and have failed to do so or where you can easily use offshore activities to pay off your debt but didn't choose to do so. Before taking this decision, the IRS sends you a Letter 6152 asking you to contact the IRS within 30 days to prevent this action.
Judicial review of certification
You can file a lawsuit in either the U.S. Tax Court or a U.S. District Court if the IRS certifies your tax debt to the State Department to get a judgment on whether the certification is incorrect or if the IRS failed to reverse the certification when required.
Conclusion
The above-mentioned actions clearly show how back-taxes and unfiled tax returns can seriously impact your passport rights. If you are seeking back taxes or unfiled tax return help in Dallas, Texas, whether it is filing unfiled tax returns, unfiled tax returns refund, or facing issues of passport denial or revocation by the IRS, consult a tax attorney who has years of experience dealing with the IRS. Many tax attorneys in Dallas, Texas resolve tax-related issues, but not all of them can give you proper advice on IRS tax relief options (if applicable). Choose a renowned tax attorney experienced in dealing with back taxes and unfiled tax returns, and can help you get relief on actions against your passport.
