Tax debt can lead to some pretty serious ramifications. In some situations, it can even impact the ability to travel. Although those with significant tax debt could likely still take domestic trips like a road trip to the beach or a getaway into the mountains, the feds can put a stop to bigger travel plans.
How can the government control my travel?
Those who looking to leave the United States likely need a passport. Without the passport it is very difficult to leave the country, enter the vacation destination country, and then return to the United States. This is the tool the government can use to impact travel plans. The U.S. State Department can deny or revoke a passport if the individual owes $59,000 or more in tax debt or if the Internal Revenue Service (IRS) has filed a tax lien or levy.
Are there any exceptions?
There are some who can still use their passport even with significant tax debt. Some examples can include taxpayers with a tax lien, levy, or significant tax debt who are in an approved payment plan like an installment agreement or going through bankruptcy.
Can I fight back?
Taxpayers can potentially take the matter to court. Unfortunately, thus far, the courts have consistently ruled in favor of the IRS.
What is the best way to handle this type of situation?
It is generally best to review the tax issue and make sure you are in compliance with applicable tax laws. Once in compliance the IRS may claim that you owe a large amount in overdue taxes, penalties, and fees. At this point, there are generally two options:
- Legal challenge. Those who disagree with the results of an IRS audit can consider various options to challenge their ruling. This can include an official appeal with the IRS or further litigation.
- It can also help to consider repayment options to address a large tax debt.
The attorneys at Goldburd McCone are experienced in both options and can take the time to review your case and discuss the benefits and risks of each. Having these conversations as soon as possible is ideal so the issue does not cause problems with future travel plans.