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Your Individual Tax Debt Can Affect Your Passport

What does your individual tax debt have to do with a passport?

Before late 2015, mostly nothing at all. Passports are issued by the State Dept., not the IRS. However, in 2015, Congress passed and President Obama signed a law that requires the IRS to notify the State Dept. of taxpayers having “seriously delinquent tax debt”. Generally defined as tax debt exceeding $50,000 and for which a lien has been filed (for tax years beginning after Jan. 1, 2016). Unless exceptions apply, such tax debt is grounds for denial of a passport or revocation or limitation of an existing passport. Now, over two years later, the IRS has finally issued guidance for the implementation of this provision, in Notice 2018-1. Although they have yet begun to “certifying” tax debt to the State Department, they have indicated this is set to begin in January 2018.

According to the IRS, not all tax debts are included in the reporting process. FBAR penalties, current installment agreements, current offers-in-compromise, and more will be excluded.

 

Questions about how this might affect you? Contact your local Blue & Co. advisor.

 

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