Can You Get a Passport if You Owe Taxes? The National Taxpayer Advocate’s Mid-Year Report

The Taxpayer Advocate Service (TAS) is an independent organization inside of the IRS that helps ensure taxpayers are treated fairly. You may remember that, back in January, the  Taxpayer Advocate Service made a list of recommendations for the IRS. Recently, the mid-year report was published, summing up the 2018 filing season, priorities for the National Taxpayer Advocate Service to address during the next fiscal year, and the IRS’s reply to the recommendations given in January. Find out the answer to the often asked question: can you get a passport if you owe taxes?

What Expats Can Expect

A confluence of problems for expats abound for expats, according to this new report. One of the problems the IRS is currently having is effectively getting in touch with taxpayers – and this problem increases when Americans live abroad.

For expats, the lack of correspondence is made worse by one the other problems the IRS is currently having, area of focus #6, entitled, “Some IRS Procedures for the Certification Program Related to Denial or Revocation of Passports Ignore Legislative Intent and Impair Taxpayer Rights.” What does this mean for expats? If your taxes haven’t been paid, you passport application or renewal can be denied. The threshold for this denial is $51,000 of overdue taxes, an amount that is particularly easy for expats to meet considering the penalties associated with noncompliance. The Wall Street Journal estimates well over a quarter of a million Americans are at risk of this. The National Taxpayer Advocate has said, “The IRS’s passport certification notice is inadequate because it provides only two options for taxpayers to prevent the Department of State from denying, revoking, or limiting a taxpayer’s passport, and fails to inform taxpayers of emergency and humanitarian exceptions.” The silver lining is that the National Taxpayer Advocate is aware of this, and is working to fix it.

What Else is New

This year, the National Taxpayer Advocate’s Mid-Year Report addresses the issue of customer service within the IRS, due to the problems faced during the 2018 filing season. The IRS was not able to answer a fair portion of the calls they received, and the report mentions that the metrics used to determine whether or not the IRS is operating efficiently fail to effectively measure the customer experience reported by the taxpayers. For instance, the IRS states that their customer satisfaction level is at 90 percent, though that number comes solely from customers whose calls were answered – and the IRS is only able to answer 29 percent of calls. IRS funding has been cut over the years; these cuts are among the reasons why they are unable to provide a higher level of customer service.

The report also pinpointed 12 areas of focus for the upcoming fiscal year, with the top five listed as:

  1. Implementation of the TCJA
  2. Evaluating IRS service channels in meeting taxpayer needs
  3. Creating an integrated case management system
  4. Addressing the large number of false-positive rates on legitimate taxpayers
  5. The advancing the rights of taxpayers facing financial hardship

Lastly, the Tax Cuts and Jobs Act has brought about many changes for most American taxpayers, and some of the issues are still a bit vague. The TAS has noted that taxpayers will need more guidance to understand and comply with the tax reform, which means that more information will hopefully be coming along soon.

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