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On December 21, 2015 we posted

 If you have seriously delinquent tax debt, IRC § 7345 authorizes the IRS to certify that to the State Department. The department generally will not issue or renew a passport to you after receiving certification from the IRS.

Upon receiving certification, the State Department may revoke your passport. If the department decides to revoke it, prior to revocation, the department may limit your passport to return travel to the U.S.
 
Seriously delinquent tax debt is an individual's unpaid, legally enforceable federal tax debt totaling more than $50,000* (including interest and penalties) for which a:

• Notice of federal tax lien has been filed and all administrative remedies under IRC § 6320 have lapsed or been exhausted or
• Levy has been issued

Before denying a passport, the State Department will hold your application for 90 days to allow you to:

• Resolve any erroneous certification issues
• Make full payment of the tax debt
• Enter into a satisfactory payment alternative with the IRS

 Have A Tax Problem?

 Want To Keep Your US Passport?

 

Contact the Tax Lawyers at 

Marini & Associates, P.A.

for a FREE Tax Consultation

at: www.TaxAid.com or www.OVDPLaw.com or

Toll Free at 888-8TaxAid (888)882-9243.

Do you owe a substantial amount of taxes to the IRS? 
If so, you've likely looked into establishing a payment plan.

What if you are simply unable to pay your tax balance? 
In this case, you might consider requesting an offer in compromise, which is a last-resort option that allows you to settle your account for literally pennies on the dollar. The key to getting approved for an offer in compromise is understanding reasonable collection potential which the IRS uses to decide if your account qualifies for this option.

A Definition of Reasonable Collection Potential
A reasonable collection potential refers to the maximum amount that the IRS believes it can collect from you over time. Generally, the agency uses a simple formula to calculate this amount, which you can easily figure on your own. However, if you want your request for an offer in compromise to be approved, you should offer the IRS at least the same amount as your reasonable collection potential and preferably a little more. If the agency believes it can collect more from you than you are currently offering it has no reason to approve your request.

How to Calculate Your Reasonable Collection Potential
Reasonable collection potential includes two factors: the liquidation value of your assets and your extra monthly income over the next four or five years. To figure your assets' liquidation value, add up the total cash you have on hand and in bank accounts as well as the current value of any investments. You'll also have to include the current value of your real assets, including cars, homes and property. You can calculate this by multiplying the fair market value by 80 percent and then subtracting any outstanding loans against the value.

The final figure is your additional monthly income after your necessary living expenses are paid. Simply deduct your essential expenses from your income and then multiply the money that is left by either 12 or 24 to figure your disposable income.. Add up your total disposable income, your current cash and investments and the liquidation value of your assets to arrive at your reasonable collection potential.

If you've been considering requesting an offer in compromise from the IRS, you need to understand how to figure your reasonable collection potential. Calculating this number can help you decide how much to offer the IRS as a lump sum which increases the chances that your request will be granted.

Downside to Submitting an OIC

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