We not only avoid debt or pay taxes to stay out of trouble but more because it reflects on an individual's responsibility. Doing something because it is one's duty to avoid underlying punishment sends a positive message to one's personality and shows discipline.
The US internal revenue service is responsible for the collection of taxes. Still, when one refuses to pay, they apply measures that will ensure the payment, and one of those is revoking of passport. They consider debt surpassing $55,000 as services which attract the penalty, that is, the debt must not be above $55,000, which they term "seriously delinquent," the height of irresponsibility.
There is always a 90 days’ notice before a passport is revoked which gives room for payment of the tax correction of a certificate error; if these measures are taken, the IRS will send the reverse notice to persons involved.
However, you can prevent the IRS from taking your passport in many ways. Here are some tips that will make the act possible:
Compromise: Uncle Sam usually makes room for partial payment of the debt, especially for people who cannot pay in total. This is only accepted for a specific amount of time they can condone. This offer is not for everyone but can be a way to ease debt. Before considering this offer, check eligibility at the IRS website.
Avoid debt: Make a conscious effort to avoid owing taxes or relevant fees up to a "seriously delinquent" stage, as this keeps one on their radar. Proper money management and spending should be employed to cut expenses, spend wisely and channel money to the right places.
Respond: Keeping mute and ignoring notices makes the situation tenser than it should be because it sends a negative message that one is trying to avoid debt. Reply to every notice, take action, go to court in charge of tax, collect petitions, and request more time for settlement while still holding your passport.
Consider Relocation: Before the IRS revokes the passport, one may consider permanent residence in another country. However, this must be done before the notice; otherwise, one remains in the US. Also, this is not very advisable as there are many disadvantages which include the inability to travel out of the resident country due to invalid passport, regardless, the risk is worth taking.
Get a Lawyer: Filing for bankruptcy is another idea to consider; this is not a Savior, but it is advisable because, on rare occasions, debts have been pardoned, especially personal income taxes. A good lawyer can represent one and guide in such processes.
Installment loan: Negotiating on installments would help gradually repay accumulated funds; they fix or allow the person to set the amount to pay at a time, let's say a month. Once the agreement is reached, the state department is notified to lift the ban for such an amount of time; if the repayment is not reached, the passport will be revoked again. This may be difficult because of one's income or net worth, but it can be achieved with the help of a tax professional.
Consider double passport: Having a second passport in hand would lessen the burden of passport revoking. One would travel out of the US using the second passport to any country, which allows visitors visa-free. This is a plus because having a US passport enables one entrance into so many countries visa-free.
To avoid passport seizure, make efforts to stay in an acceptable payment plan or opt for emergency passport licensing, which is applicable in dire or humanitarian causes. One should also try to clear the debt before getting to the debt limit. A person must not be free of debt or owe a considerable amount.
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