Late on Your Taxes? Your Vacation Plans May Get Grounded

If you owe tons of cash to the IRS, you almost certainly shouldn’t make overseas travel plans anytime soon: That unpaid bill could prompt the State Department to revoke your passport or reject your application for a replacement one.
But before you begin unpacking your suitcase, here are three things tax pros say you ought to know if you would like to stay your tax debt from sending your passport on the incorrect quite vacation.

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Communicate with the tower

Things need to be pretty bad for the IRS to return after your passport, says Eli Noff, a tax attorney and authorized public accountant at Frost & Associates in Annapolis, Maryland. First, your overdue bill has got to be quite $52,000, including interest and penalties. (In 2020, the edge is $53,000.) Second, the bill has got to be “seriously delinquent” — that's , the IRS is essentially at the top of its rope with you regarding trying to gather payment.
Avoid the headache by responding to the IRS when it contacts you, Noff says. “Usually once you file a income tax return and there’s a balance, there’s a series of notices that the IRS will issue,” he says. “Either a notice of federal lien has been filed and your right to appeal has passed, or a notice of intent to levy has been filed and your right to appeal has passed. Once you’ve passed that, you’re seriously delinquent.”
It might take months to urge thereto point, Noff says, but when it does, fasten your safety belt — the IRS can tell the State Department to deny your passport application or maybe revoke your current passport.

 Brace for turbulence

A government employee probably won’t show up at your door to require your passport away, Noff says. But if you are doing hand it over, you'll not catch on back.
“Let’s say … your passport expired and you tried to urge it renewed — they will either take it away or they will deny you a renewal,” he says. If you’re out of the country when the State Department puts a ground stop on your passport, it's going to issue you a limited one that’s good for an immediate return to the us .

Escape the holding pattern

Several rule exceptions might keep your passport off the red-eye to nowhere. Bankruptcy can put the brakes on things, for instance , as can fixing an IRS debt-settlement agreement called a suggestion in compromise. Requesting innocent spouse relief may additionally work, as can living during a federal area , being the victim of tax-related fraud or demonstrating true financial hardship.
You can also file suit within the U.S. Tax Court or a U.S. District Court if you think that the IRS has flagged your passport in error.
But perhaps the simplest answer of a passport pickle is simply to pay your bill or get on a payment plan. The IRS offers installment programs which will help.
“If they’re working it out with the IRS — if there’s a suggestion to compromise even, or if there’s an installment agreement, or if they’re still browsing a collections process — the passport revocation measures aren't getting to become ,” says James Curtis, a senior manager of international tax services at Hall & Company CPAs & Consultants in Irvine, California.
But if you’re hoping to catch that plane to Paris next week, your passport likely won’t be ready in time, Noff says. All of these options can take the IRS weeks or months to process, he warns. Plus, the IRS has a further 30 days to inform the State Department to offer your passport the green light again.
“Probably somewhere between two to 6 weeks, i might say, is that the quickest turnaround ,” Noff says.
And if you’re also behind on your state taxes, make an idea for that, too, Noff says. Otherwise, you'll have trouble renewing your driver’s license and car registration — or your nursing license, land license or other professional license from the state.