The Internal Revenue Services (IRS) recently issued a statement encouraging taxpayers to pay their overdue tax bills. A failure to do so, the agency reminds taxpayers, could result in a forfeiture of one’s passport.
Who could lose their passport? The agency states that anyone that is “seriously delinquent” in tax obligations is at risk of losing their passport. This is defined to include those who owe over $51,000 in taxes as well as penalties and interest.
How can those who are at risk protect their passports? The agency highly recommends paying off the bill in full. However, other options are available. In some cases, a taxpayer can receive approval to pay off the bill in installments or reach another settlement agreement.
Taxpayers may also qualify for an offer in compromise. An offer in compromise is basically an offer by the taxpayer to pay the IRS a lower amount than what is due. In exchange for forgiving the remainder of the tax debt, the IRS receives the most payment it would likely receive from the taxpayer.
The agency takes various factors into consideration when accepting such an offer. These can include the health and earning capacity of the taxpayer as well as current liabilities and compliance with tax laws.
Those who are concerned that their passport may be at risk are wise to seek legal counsel. An attorney experienced in offers in compromise and other defenses to collection efforts by the IRS can review your situation and provide advice on how to best protect your interests.