Passports and Seriously Delinquent Tax Debt
If you (or someone you know) was certified to the Department of State by the Secretary of the Treasury as having a seriously delinquent tax debt, you cannot be issued a U.S. passport and your current U.S. passport may be revoked. If tax debt is not resolved before applying for a passport (including a renewal of your passport) your application can be delayed or denied.
Revocation or Denial of Passport in Case of Certain Unpaid Taxes
If you have seriously delinquent tax debt, the law authorizes the IRS to certify that debt to the State Department for action. The State Department generally will not issue a passport to you after receiving certification from the IRS. The State Department may deny your passport application or revoke your current passport. If you’re overseas, the State Department may issue you a limited validity passport good for direct return to the United States.
What tax debt does the IRS certify to the State Department?
The IRS certifies seriously delinquent tax debt to the State Department. Seriously delinquent tax debt is an individual’s unpaid, legally enforceable federal tax debt (including interest and penalties) totaling more than $55,000 (adjusted yearly for inflation) for which 1) Notice of federal tax lien has been filed and all administrative remedies under the law have lapsed or have been exhausted, or 2) Levy has been issued.
It includes U.S. individual income taxes, Trust Fund Recovery Penalties, business taxes for which the individual is liable and other civil penalties.
What tax debt does the IRS not certify to the State Department?
Some tax debt isn’t included in seriously delinquent tax debt such as the Report of Foreign Bank and Financial Account (FBAR) penalty and child support. Also not included are tax debt:
Being paid timely with an IRS-approved installment agreement,
Being paid timely with an Offer in Compromise accepted by the IRS or a settlement agreement entered with the Justice Department,
For which a collection due process hearing is timely requested regarding a levy to collect the debt, and
For which collection has been suspended because a request for innocent spouse relief has been made.
Also, the IRS will not certify anyone as owing a seriously delinquent tax debt:
• Who’s in bankruptcy,
• Who’s identified by the IRS as a victim of tax-related identity theft,
• Whose account the IRS has determined is currently not collectible due to hardship,
• Who’s located within a federally declared disaster area,
• Who has a request pending with the IRS for an installment agreement,
• Who has a pending Offer in Compromise with the IRS, and
• Who has an IRS accepted adjustment that will satisfy the debt in full.
The IRS will postpone certification while an individual is serving in a designated combat zone or participating in a contingency operation.
How it works
Certification to the State. The IRS will send you Notice CP508C at the time the IRS certifies seriously delinquent tax debt to the State Department. The IRS will send the notice by regular mail to your last known address. Your power of attorney will not receive a copy of the notice.
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 a satisfactory payment arrangement with the IRS
Reversal of certification. The IRS will send you Notice CP508R at the time it reverses certification. The IRS will reverse a certification when:
• The tax debt is fully satisfied or becomes legally unenforceable,
• The tax debt is no longer seriously delinquent, or
• The certification is erroneous.
The IRS will make this reversal within 30 days and provide notification to the State Department as soon as practicable.
The IRS will not reverse certification if your request for a collection due process hearing or innocent spouse relief is on a debt that’s not certified. Also, the IRS will not reverse the certification because you pay the debt below the threshold.
Referral to revoke passport. The IRS may ask the State Department to exercise its authority to revoke your passport. For example, the IRS may recommend revocation if the IRS had reversed your certification because of your promise to pay, and you failed to pay. The IRS may also ask the State Department to revoke your passport if you could use offshore activities or interests to resolve your debt but choose not to.
Before the IRS sends a revocation referral to the State Department, the IRS will send you Letter 6152 asking you to call the IRS within 30 days to resolve your account to prevent this action.
Judicial review of certification. The State Department is held harmless in these matters and cannot be sued for any erroneous notification or failed decertification under the law.
If the IRS certified your debt to the State Department, you can file suit in the U.S. Tax Court or a U.S. District Court to have the court determine whether the certification is erroneous, or whether the IRS failed to reverse the certification when it was required to do so. If the court determines the certification is erroneous or should be reversed, it can order the IRS to notify the State Department that the certification was in error.
The law doesn’t give the court authority to release a lien or levy or award money damages in a suit to determine whether a certification is erroneous. You’re not required to file an administrative claim or otherwise contact the IRS to resolve the erroneous certification issue before filing suit in the U.S. Tax Court or a U.S. District Court.
If you, or someone you know, has seriously delinquent tax debt; let the law firm know so that we can assist with a resolution.
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Passports and Seriously Delinquent Tax Debt