You may have heard alot of commotion lately about the Real ID Act and its effect on your ability to enter a federal building (military bases, for instance) in Oklahoma and, ultimately, domestic and international travel for Oklahomans.
In essence, Oklahoma and a handful of other states were given until October 10, 2016 to comply with the Real ID Act. The 2005 Federal legislation is an anti-terrorism measure. In 2007, Oklahoma passed its own legislation opting-out of the Federal system amid concerns over the Act’s requirements of high-resolution photos for facial recognition software and the fear the Federal system would construct a national database of citizens.
On September 23, 2016, the Act’s compliance deadline was extended 90 days to January 10, 2017. So, for the moment, you can still use your driver’s license to enter military bases in Oklahoma and board an aircraft (through January 18, 2018).
However, absent Oklahoma’s compliance with the Act (or another extension) by January 10, 2017, Oklahomans will have to use alternative forms of identification that comply with the Act, such as a valid passport.
Oklahoma taxpayers who owe $50,000 or more to the IRS should pay pay particular attention to these recent developments, as it may affect your ability to enter or work at a military base and, ultimately, it may prohibit you from boarding an aircraft for domestic or international travel.
In late 2015, H.R. 22 passed, adding new section 7345 to the tax code, entitled “Revocation or Denial of Passport in Case of Certain Tax Delinquencies.” The controversial provision passed as a ride-along to unrelated legislation, Fixing America’s Surface Transportation Act, the “FAST Act.” The legislative idea appears to have been bipartisan. It went into effect January 1, 2016.
The law states that the State Department can revoke, deny or limit passports for any taxpayer the IRS certifies as seriously delinquent on taxes. “Seriously delinquent” means a tax debt of $50,000 or more, including penalties and interest. The IRS already files Notices of Federal Tax Liens on these delinquent taxpayers and it is believed that they will use these lists to notify the State Department.
The law has yet to face a constitutional challenge and administrative commentary is virtually non-existent at this point. The right to travel has been judicially recognized as constitutionally fundamental. However, this law is modeled after long-standing laws restricting travel for Americans with delinquent child support debts of $2,500 or more.
Here’s what you need to do if you owe $50,000 or more to the IRS...
You may apply to the State Department for an administrative exception for emergency or humanitarian reasons. However, administrative delays for such requests seem likely.
The effects of this law do not apply to taxpayers that are challenging their tax bills in tax court or seeking a collection alternative with the IRS. The most widely used “collection alternatives” are installment agreements (payment plans) of various types and the IRS’ offer in compromise program.
Pay the debt entirely (or at least below the $50,000 threshold), request an installment agreement or an IRS settlement/offer in compromise. Be aware that the IRS requires the taxpayer to fill out a Collection Information Statement for serious delinquent tax debt. This means that you will have to tell the IRS where you work, where you bank and what assets you have. Many seriously delinquent taxpayers increase their chances of obtaining a collection alternative by hiring a local, licensed tax lawyer that works with the IRS routinely in these situations.
The IRS is not always expeditious about deciding these collection alternatives. Offers in compromise, for instance, are taking about 6 months to be processed at this time. So,time is of the essence. The IRS won’t likely expedite your requests to avoid the effects of the Real ID Act on Oklahoma. If you have unfiled returns, those will need to be filed and assessed before relief can be accomplished. My office files delinquent returns and talks to the IRS about settling these debts, so you don’t have to. Get started today!