On Thursday, the BHCB team came together for our annual Summer outing. This year the outing was held at the Silver Sands Beach & Tennis Club in East Haven. It was a beautiful sunny day filled with delicious food and great conversation.

Quick, how many subscription services are you currently paying for? Whatever the number, it’s likely you missed one or two. Subscription services have been around for a long time – think newspaper and magazine subscriptions. Today, however, they’ve ballooned to include digital subscription services such as video and music streaming, internet and cell phone. Food delivery and retail subscriptions are also available.

Most providers offer free trials and automatic recurring credit card payments, so you may have trouble keeping track of all your subscriptions. Those recurring costs can quickly add up and take a big bite out of your household budget.

In the current inflationary environment, the cost of almost everything is increasing. So you may want to look for monthly expenses to slash. You can wrangle subscription costs in three simple steps:

1. Review recent credit card and bank statements,
2. Identify recurring subscription charges, and
3. Cancel the subscriptions you’re not using or are using infrequently enough that it wouldn’t be a hardship to cancel them.

If poring over your banking records is too time consuming, there are several budgeting apps that can do the work for you. These apps monitor your financial transactions and identify recurring transactions, allowing you to cancel unwanted subscriptions.

Some will even cancel subscriptions for you. Keep in mind, however, that this service typically comes with its own monthly fee.

Let’s say a person is planning to take a plane trip out of the country. And further suppose that individual owes the federal government a fair amount of back taxes. The person may not be able get a passport if he or she owes the government a significant amount of back taxes. The IRS is now reminding taxpayers that legislation passed back in 2015 allows the tax agency to revoke passports or deny new ones to major debtors.

Background of the Law

Under the Fixing America’s Surface Transportation Act of 2015, a highway spending measure, the IRS was granted the authority to notify the U.S. State Department about taxpayers who have “seriously delinquent tax debts.” The State Department is then tasked with denying the individual their passport application or renewal. It took a while to put the wheels in motion, but the IRS has been enforcing this provision of the law for several years.

For these purposes, a seriously delinquent tax debt is defined as $50,000 or more, indexed for inflation. The threshold for 2024 is $62,000 (up from $59,000 in 2023). This includes back taxes, penalties and interest for which the IRS has filed a tax lien or issued a levy.

How It Works

If a taxpayer is certified as owing a seriously delinquent tax debt, he or she receives a Notice CP508C from the IRS. This notice explains the steps that must be taken to resolve the debt. For instance, IRS representatives may help a taxpayer set up a payment plan or explain other payment alternatives. People who owe back taxes shouldn’t delay — especially if they’re planning a trip abroad.

Once the tax obligations are met, the IRS will reverse the taxpayer’s certification within 30 days. Matters may be expedited under certain circumstances.

Before denying a passport renewal or new passport application, the State Department will hold a taxpayer’s application for 90 days to allow him or her to resolve any erroneous certification issues, make full payment of the tax debt or enter into a satisfactory payment arrangement with the IRS.

In an IRS announcement, the agency presents several ways that an individual can avoid having the State Department notified of a seriously delinquent tax debt, including the following:

• Pay the tax debt in full;
• Pay the tax debt in a timely manner under an approved installment agreement;
• Pay the tax debt in a timely manner under an accepted offer in compromise (OIC);
• Pay the tax debt in a timely manner under the terms of a settlement agreement with the Department of Justice (DOJ);
• Have requested or have a pending collection due process appeal with a levy; or
• Have collection suspended because you’ve made an innocent spouse election or requested innocent spouse relief.

The IRS also has provided details on two key relief programs available to taxpayers who could have their passports revoked or denied.

1. Payment agreements. A taxpayer can formally request to use a payment plan by filing Form 9465. This form can be sent with a tax return bill or notice or a taxpayer can arrange a monthly payment agreement online.

2. Offers in compromise (OIC). With an OIC, a taxpayer settles up with the IRS for an amount that’s less than the actual tax liability. The IRS will examine the individual’s income and assets to determine his or her ability to pay. An individual can use an online pre-qualifier to see if he or she is likely to qualify for an OIC.

Other special rules apply to taxpayers who are currently serving in a combat zone.

Moral of the story: As you can see, there are several available options for avoiding a worst-case scenario. With assistance from a tax advisor, a person who owes back taxes should be able to find a soft tax landing.