IRS passport seizure is more limited than you think.
For the last few years, we have had to pause our vacations and big trips due to COVID travel restrictions. Now, however, travel is coming back – we can take those cruises to the Bahamas, fly to visit family in different countries, cross destinations off our bucket-list.
As you start to plan for upcoming travel, you may pause for concern over the possibility the IRS will stop your trip. You may be worried since receiving IRS Letter CP508C, Notice of Certification of Seriously Delinquent Federal Tax Debt to the State Department.
Letter CP508C is what starts the “passport revocation” process, as the IRS notifies the State Department about your tax debt. Then, the State Department can decide between two options:
- Revoking an existing passport
- Denying an application for a new passport
While the IRS CP508C letter is scary, you can rest easy knowing its threats about your passport do not always play out to the extremes you may imagine.
Your fear of showing up to the airport only to find out you need to turn right around is not necessarily realistic.
The truth is, the way the State Department responds to tax debt is not the one-size-fits-all they make it seem. In our experience, we have seen them draw a clear line: current passports are not at risk and remain usable, but getting a new passport is a “no-go.”
When the State Department outlines the consequences of receiving IRS letter CP508C, their position on current passports versus new passports differs. On one hand, they seem to take a more relaxed position regarding current U.S. passports, writing that they “may revoke your current U.S. passport.” On the other hand, the State Department appears much firmer when speaking of renewing or issuing a new passport: they write that they will deny an application to renew or issue a new passport.
In other words, if you have a current passport, the State Department will be giving you travel flexibility, but they will be denying your renewal and application for a new passport.
Also, take comfort in knowing that simply receiving letter CP508C from the IRS does not directly impact your passport status. Rather, there must be a second letter – this one coming from the State Department, not the IRS – notifying you that your passport is revoked. If you have not received this second letter, your passport is still viable and safe. Out of all my clients, none have received this second letter revoking their current passport.
If you have received IRS letter CP508C and find that your passport will soon expire and require renewal, or you want absolute certainty your future travels will be secure, we can choose an option to calm the IRS and the State Department and get your passport back on track. These options range from entering into an installment agreement to securing currently noncollectible status.
It’s exciting that travel opportunities have returned, and you should be able to enjoy seeing family overseas or visiting a new destination. Even though you have received IRS letter CP508C, you have options and flexibility to still take a trip. IRS letter CP508C does not directly take a current passport away, but it does mean the State Department will deny an application for a new passport. As long as you have not received a second letter from the State Department notifying you of passport revocation, you can rest a bit easier and we will work together to resolve your tax debt, ensuring your future travels.
