Millions of Americans owe taxes to the IRS, which can come at a huge cost. Penalties and interest add up quickly, leaving many in a hole that is difficult to climb out of. The IRS is dedicated to collecting their rightfully owed funds, which means that there are ever-growing consequences for not paying them. According to a new IRS passport back taxes notice, people who owe Uncle Sam money may soon not be able to get a passport.
IRS 2018-01: What It Means for You and You
According to the first IRS notice of the new year, people who owe the government back taxes may soon not be able to access passports. The law regarding this matter was passed in 2015, but was not enforced. However, the IRS has clarified exactly how they intend to enforce it in the future. When citizens owe taxes, the IRS will notify the State Department, which will then deny passport applications.
The IRS has already sent out the first round of notices to taxpayers who are subject to this IRS passport back taxes practice. If you have received this notice, there are several ways that one can and should deal with the situation. They can pay their tax debt in full, which is usually the best response. If this is not possible, they can make a payment plan with the IRS or offer a compromise offer. Notably, this should be done 45 days before the passport is needed, as it will take about this long for the IRS to communicate with the State Department and for the State Department to clear any IRS passport holds. If they believe they have been assigned a debt in error, their only recourse is to sue the IRS in civil courts.
IRS Passport Tracking: Who Will Be Affected?
There is a great deal of confusion about this IRS passport notice and who it applies to. In general, it will apply to anyone who owes more than $50,000. This may affect a surprising amount of people as this amount does not include just the original amount owed, but also the interest, penalties, and other charges. An unpaid tax charge of $20,000 can turn into a $50,000 debt quickly. In addition, IRS passport tracking does not apply only to people who have criminal proceedings, but all who owe money and have not set up or followed a payment plan.
Can You Get a Passport If You Owe Taxes? The Final Word
If you are subject to this notice, you should already have been notified. However, if you believe that you should have gotten a notice but for some reason did not, it is best to check with both the IRS and the State Department. Letters are sometimes lost in the mail, and it is best to deal with these issues before arriving at the airport.
If you owe large amounts of taxes, you should contact us and start the ball rolling immediately. No adult wants to be effectively grounded; this notice will likely have that effect. This new law may motivate many who owe back taxes to see a CPA and get the matter resolved in a timely manner, which ultimately will be beneficial to the government and its taxpayers.
