Could Delinquent Taxes Prevent You From Taking Vacation?

Now that you have planned your trip, purchased plane tickets, and booked hotels, you are ready for your vacation. There's just one thing: you need to renew your passport. The thing is, your application has been denied. This could be the result of Fix America's Surface Transportation Act, also known as FAST Act. The main idea? The government can deny you a passport if it finds you to be seriously delinquent on your taxes.

What Makes Somebody Seriously Delinquent on Taxes?

Generally, owing $50,000 or more in back taxes makes you very delinquent. Of course, this is to the discretion of the government and may include interests, levies, and more. If a federal tax lien was filed against you or you received notice of intent to file one, you may also qualify for this title. Likely, you have received notices about your status.

Exemptions on FAST Act

There is some good news here. If you have been making regular payments on your back taxes, there are exemptions. Paying according to your agreed installment plan ensures that the IRS is not set to revoke your passport (or your much-needed vacation). Exemptions are also available for those who are pending a due process hearing as well as for those who have submitted a compromise offer to the IRS. Innocent spouse relief is also available.

The Solution to Getting Your Passport Back

Here are a few things you may need to do in order to get yourself off the list for passport revocation:

- Pay your tax debt in full.

- Enter an installment agreement with the IRS, and stay up to date with payments.

- Request an offer in compromise and wait for the IRS to accept it.

- If you are the spouse of somebody who is behind in taxes, you may be able to request relief.

As you can see, the solution is most commonly to pay off the tax debt.

You certainly do not want to find yourself in this position, and even if you already are, there is a solution. Consulting with financial advisors may ease your fears about delinquent taxes, ensuring that your travels are never put on hold. Additionally, a financial planner may help you to negotiate a repayment plan or find a compromise. It is important not to delay in paying your taxes for a variety of reasons, and this is merely one of them.