Last year, the IRS began a policy of notifying the State Department of “seriously delinquent taxpayers.” To be considered in this category, a taxpayer must have $52,000 or more of back taxes, penalties and interest, and have not already entered into an acceptable payment arrangement with the IRS. After being notified, the State Department must deny the passport renewal or application. Today, the IRS has reiterated this warning, which likely signals it is not just an empty threat.
However, this does not have to be a scary situation. The key is that a taxpayer will not be considered seriously delinquent, thereby protecting their passport, if they enter an acceptable payment arrangement with the IRS. This can include processes such as an offer in compromise or an installment agreement. Therefore, any taxpayers with tax debt in excess of $52,000, who need their passport, should immediately contact the IRS and proactively address the situation.