How Do I Get an IRS Tax Clearance Certificate?

The IRS doesn’t issue a single document called an IRS tax clearance certificate. It issues different documents for different situations, and the one you need depends on why you need it. Non-citizens leaving the country get a Certificate of Compliance, commonly called a sailing permit, by filing Form 1040-C or Form 2063. U.S. citizens and residents who need to prove tax standing to a lender request a tax transcript. Anyone who needs to prove U.S. tax residency to a foreign government files Form 8802 to receive Form 6166. Businesses shutting down don’t get a certificate at all; they file final returns and close their IRS account.

Sailing Permit for Non-Citizens Leaving the U.S.

Federal law requires most non-citizens to obtain a certificate showing they’ve met their U.S. income tax obligations before leaving the country.¹ This is the Certificate of Compliance, and it’s the closest thing the IRS offers to a formal tax clearance certificate. You obtain it by filing Form 1040-C or Form 2063 in person at an IRS Taxpayer Assistance Center. Once an IRS agent reviews the form and confirms your taxes are paid, the agent signs the certificate of compliance section. Your copy of that signed form is the sailing permit.²

Which Form to File

Form 1040-C is the fuller return. It requires you to report all income received or expected during the tax year through your departure date and to compute and pay the tax owed. Resident aliens report the same types of income they would on a standard Form 1040; nonresident aliens report income connected to a U.S. trade or business along with certain U.S.-source income like dividends and rents.³

Form 2063 is much shorter and requires no tax computation. You can use it if you’re a resident alien whose taxable year has not been terminated, or a nonresident alien with no taxable income from U.S. sources.⁴ Anyone who doesn’t fit those conditions files Form 1040-C.

Who Doesn’t Need a Sailing Permit

Several categories of non-citizens can leave without a departure permit, though you should carry documentation supporting your exemption in case an official asks. The main exempt groups are:³

Foreign government representatives with diplomatic passports, along with their household members and accompanying servants.
Students and exchange visitors on F-1, F-2, H-3, H-4, J-1, J-2, Q-1, M-1, or M-2 visas whose only U.S.-source income is study-related allowances, employment authorized under immigration law, or bank deposit interest not connected to a U.S. business.
Tourists on B-2 visas, business travelers on B-1 visas staying no more than 90 days, travelers passing through on C-1 visas, and people admitted on border-crossing identification cards.
Residents of Canada or Mexico who regularly commute to U.S. jobs and already have income tax withheld from wages.

If you signed a waiver of nonimmigrant privileges as a condition of your job and immigration status, these exemptions no longer apply and you must still obtain a certificate.

How to Apply

Applications are handled in person by appointment. Call 844-545-5640 to schedule a visit at a Taxpayer Assistance Center. Apply no earlier than 30 days before your planned departure and no later than two weeks before you leave.³ Bring your passport and visa documentation, income records for the current year through your departure date (W-2s, 1099s, and records of any other U.S.-source income), proof of taxes already paid such as withholding or estimated tax records, receipts for any deductions you plan to claim, and any unfiled returns from prior years ready to submit with payment.

What Happens at the Appointment

The agent reviews your forms and supporting documents, verifies the numbers, and issues the sailing permit on the spot if everything is in order and you pay any tax due.² Prior-year balances have to be settled before the permit is issued, though the IRS may accept a bond guaranteeing payment in some cases. There’s also an exception if you can show you intend to return to the U.S. and that leaving won’t make collection harder; in that case you can receive a permit on Form 1040-C without paying the tax shown on it, though unfiled prior-year returns still have to be filed and paid.

Providing false information on either form is a felony punishable by a fine of up to $100,000 (up to $500,000 for a corporation), up to three years in prison, or both.⁵

After Departure

Keep the certificate accessible while traveling. Officials at airports and seaports may ask to see it, and failing to produce it can cause delays or block your departure. The certificate does not replace your annual return. You still have to file a regular return by the standard deadline for the year you departed, and that return reconciles the tentative tax paid during the clearance process with your actual full-year liability. Overpayments get refunded; underpayments have to be paid.³

Tax Transcripts for Lenders and Financial Transactions

If you’re a U.S. citizen or resident and someone (usually a mortgage lender) asks for proof of your tax standing, the sailing permit process doesn’t apply. The IRS provides free tax transcripts through the Individual Online Account at irs.gov.⁶ Four types cover most needs:

Tax return transcript. Shows most line items from your original return as filed. Available for the current year and three prior years. Mortgage lenders commonly accept this one.
Tax account transcript. Shows filing status, taxable income, payment types, and any post-filing changes. Available for the current year and nine prior years.
Record of account transcript. Combines the return transcript and account transcript. Available for the current year and three prior years.
Verification of non-filing letter. Confirms the IRS has no record of a return for a given year. Available after June 15 for the current year and anytime for three prior years.

You can view, print, or download all of these through your online account. If you’d rather not use the online system, call 800-908-9946 or mail Form 4506-T.

Form 6166 to Prove U.S. Residency to a Foreign Government

When a foreign government or financial institution asks for proof that you’re a U.S. tax resident, usually to claim treaty benefits or a VAT exemption, the document they want is Form 6166. It’s a letter on Treasury Department stationery certifying that you are a U.S. resident for income tax purposes.⁷

You get Form 6166 by filing Form 8802, the Application for United States Residency Certification.⁸ A nonrefundable user fee applies: $85 for individuals or $185 for businesses and other non-individual applicants. The fee covers the application regardless of how many countries or tax years you request certification for.⁹

Closing a Business

The IRS doesn’t issue a tax clearance certificate when a business shuts down. Compliance is shown by filing all required final returns, paying remaining balances, and closing your IRS business account. The filings depend on the entity type:¹⁰

Sole proprietors file a final Schedule C with the individual return for the year of closure. Form 4797 may also be needed for business property sales, and Schedule SE if net earnings reached $400 or more.
Partnerships file a final Form 1065 with the “final return” box checked and mark each partner’s Schedule K-1 as final.
C corporations file Form 966 within 30 days of adopting a dissolution resolution, then a final Form 1120 with the “final return” box checked.¹¹
S corporations follow the same process as C corporations but file a final Form 1120-S.

Businesses with employees also file final employment tax returns (Form 941 or 944 for the last quarter, Form 940 for the final year) and issue W-2s. Contractors paid $600 or more get a Form 1099-NEC. To officially close the IRS business account and cancel your EIN, send a letter that includes the business’s legal name, EIN, address, and the reason for closing. The IRS won’t close the account until every required return is filed and every tax is paid. Many states require a separate state-level tax clearance before you can formally dissolve a business entity, so check your state’s rules as well.

Discharging a Federal Tax Lien on Specific Property

If the IRS has placed a federal tax lien on property you need to sell or refinance, the relevant document is a certificate of discharge. Discharge releases a specific property from the lien; it is not the same as a full lien release, which happens only when the underlying debt is satisfied or becomes unenforceable.¹²

The IRS may discharge property in several circumstances, including when the remaining property subject to the lien is worth at least double the outstanding liability, when a partial payment covers the government’s interest in the property, or when sale proceeds will be held in a fund subject to the government’s claim. Submit the application to the IRS Advisory Group Manager for the location where the lien was filed, at least 30 days before the closing or sale date. The application requires a property description, an appraisal, copies of the lien, a proposed closing statement, and a title report showing all encumbrances.

1
Office of the Law Revision Counsel. 26 USC 6851 – Termination Assessments of Income Tax
2
Internal Revenue Service. Topic No. 858, Alien Tax Clearance
3
Internal Revenue Service. Departing Alien Clearance (Sailing Permit)
4
Internal Revenue Service. About Form 2063, U.S. Departing Alien Income Tax Statement
5
Office of the Law Revision Counsel. 26 USC 7206 – Fraud and False Statements
6
Internal Revenue Service. Transcript Types for Individuals and Ways to Order Them
7
Internal Revenue Service. Form 6166 – Certification of U.S. Tax Residency
8
Internal Revenue Service. Form 8802, Application for United States Residency Certification – Additional Certification Requests
9
Internal Revenue Service. Instructions for Form 8802
10
Internal Revenue Service. Closing a Business
11
Internal Revenue Service. Form 966 Corporate Dissolution or Liquidation
12
Office of the Law Revision Counsel. 26 U.S. Code 6325 – Release of Lien or Discharge of Property