If you have clients who are delinquent on their federal taxes, they may need to delay any plans they have for an international vacation.
Since January, the IRS and the State Department have been enforcing a 2015 law that denies passport renewals or applications to citizens with a "seriously" delinquent tax debt. The law generally impacts those who owe the federal government $51,000 or more in taxes, including interest and penalties, the IRS said.
In a recent disclosure, the IRS said that about 362,000 people have delinquencies above the $51,000 threshold and could be impacted by the law, the Wall Street Journal reported.
The State Department has confirmed that it has already denied passports to some people on the list, according to the newspaper.
The IRS has noted that in some cases the State Department may revoke existing passports of people with serious tax delinquencies.
There are, however, some exceptions to the rule. Taxpayers deemed seriously deliquent won't have their passports denied if they meet any of the following conditions:
• They are in bankruptcy.
• They are the victims of tax-related identity theft.
• They have accounts deemed not collectible because of financial hardship.
• They live in a federally declared disaster area.
• They have requests pending for an IRS installment agreement or compromise, or a deal with the IRS for a tax adjustment.
In all other cases, the only way for deliquent taxpayers to get their passports is to pay their debts -- either in full or through an agreed payment plan. Taxpayers are also taken off the passport suspension list if their collection is suspended because they have made an innocent spouse election or requested innocent spouse relief.