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How a tax debt could put a passport in jeopardy

On Behalf of | Sep 14, 2018 | IRS Issues

Georgia residents and others who owe a significant tax debt could be in danger of losing their passport. If the IRS determines that a person is trying to evade paying taxes or leave the country to avoid paying taxes, it will notify the State Department. At that point, the State Department will then either not issue a passport or decline to renew one that a debtor already has.

Typically, this step is taken when a person owes $50,000 or more, and that amount includes fees and penalties accrued on top of the original balance. It is important to understand that receiving a notice from the IRS simply means that it is proposing an amount that a taxpayer owes. There are many notices sent before the proposed bill turns into an actual bill. Taxpayers can postpone this from happening by filing protests and appeals to the IRS all the way to the U.S. Tax Court.

Those who owe the IRS $50,000 or more in back taxes are encouraged to contact the agency quickly to discuss the matter. It may be possible to pay the balance in full to avoid losing a passport. Alternatively, the government may be open to a payment plan that pays the balance over time. An offer in compromise could also be an option for those who can’t pay the full balance at once.

Failing to pay income or other taxes could result in wage garnishment, loss of assets or the loss of a passport. Individuals who lose their passports may not be able to travel outside of the United States for any reason. An individual may consult with the IRS or with an attorney about an overdue debt. An attorney may be able to negotiate with the IRS on a taxpayer’s behalf.