Posted by Carmen Garcia

IRS Guidelines on the Denial & Revocation of Passports for Breach of Serious Tax Obligations.

IRS Guidelines on the Denial & Revocation of Passports for Breach of Serious Tax Obligations.

The IRS has issued guidelines on the denial and revocation of passports due to serious tax violations. The IRS must notify the State Department when a person has a "serious" tax liability. Typically, upon receipt of such notification, the State Department will reject a new passport application or a renewed passport application.

The State Department can also revoke or limit a previously issued passport. The IRS and the State Department began implementing these rules in January 2018.


What tax debt does the Internal Revenue Service certify to the State Department?

The IRS certifies non-refundable tax debts with the Department of State. The serious delinquency tax liability is a non-legally applicable federal tax liability (including interest and fines) totaling more than $54,000 (adjusted annually for inflation) for which:

  • A Federal Tax Guarantee Notice has been filed, and all administrative remedies have expired or been exhausted, or

  • Ar levy has been issued.


What tax debt does the Internal Revenue Service not certify to the State Department?

Some tax debts are not included in the severely delinquent tax debt, such as FBAR (foreign bank and financial account report) penalty and alimony. Tax debts that are also not included are:

  • Being paid on time with an IRS approved installment agreement,

  • Being paid on time with an offer in compromise accepted by the IRS or a settlement agreement with the Department of Justice.

  • For which a collection due process hearing is appropriately requested regarding a levy to collect the debt.

  • For which the charge has been suspended because a request for innocent spouse relief was made.

Additionally, the IRS will not certify anyone with a severely delinquent tax liability:

  • An individual in bankruptcy

  • An individual who has an adjustment accepted by the IRS that will fully cover the debt.

  • An individual who the IRS identifies as a victim of tax identity theft,

  • An individual whose account established by the IRS is currently a non-performing debt due to hardship,

  • Anyone in a federally declared disaster area 

  • Anyone who has a pending OIC (offer in compromise) with the IRS

  • Anyone with a pending request in progress with the IRS for an installment agreement

The IRS will defer certification while a person is serving in a designated combat zone or participating in an emergency operation.


How it works

Certification of the State

The IRS will send you the Notice CP508C when the IRS certifies a serious non-payment tax debt with the State Department. The IRS will send the notification by regular mail to your last known address. Your attorney will not receive a copy of the notification.

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

  • Enter into a satisfactory payment agreement with the IRS

  • Make full payment of the tax debt.

  • Resolve any incorrect certification issues

Reversal of certification

The IRS will send you the Notice CP508R when you cancel the certification. The IRS will reverse the certification when:

  • The certification is incorrect.

  • The tax debt is no longer seriously delinquent or

  • The tax debt is paid in full or becomes legally unenforceable,

The IRS will revoke this within 30 days and notify the State Department as soon as possible.

The IRS will not revoke the certification if your request for an innocent spouse hearing or exemption relates to uncertified debt. Additionally, the IRS will not revoke the certification because you are paying the debt below the threshold.


Reference to revoke the passport

The IRS may require the State Department to exercise its passport revocation power. For instance, the IRS may recommend revocation if the IRS revoked the certificate because of the promise to pay and you haven't paid. The IRS can also ask the State Department to revoke your passport if you can use foreign assets or interest to pay off your debt but choose not to.

Before the IRS sends a revocation request to the State Department, the IRS will send you a letter 6152 asking you to call the IRS within 30 days to close your account and prevent this action.


Judicial review of certification

The State Department is exonerated from all responsibility in these matters. According to the law, it cannot be prosecuted for any erroneous notification or failure to comply with the certification.

Suppose the IRS has certified your debt to the State Department. In that case, you can take legal action in the United States tax court or United States district court to have the court determine whether the certification is incorrect or if the IRS has not reversed it. . If the court finds that the certification is in error or needs to be revoked, it can order the IRS to notify the State Department that the certification was in error.

The law does not give the court the power to issue a guarantee or pledge or award pecuniary damages as part of legal action to determine whether a certification is incorrect. You do not need to file an administrative complaint or contact the IRS to resolve the issue of improper certification before initiating legal action in the United States Tax Court or United States District Court.


What to do

Payment of taxes

If you are incapable of paying the full amount owed, you can make other payment arrangements, such as a payment plan or a certification cancellation offer.

If you do not agree with the amount of the fee or if the certification was made in error, please contact the telephone number indicated in notice CP508C: 855-519-4965; 267-941-1004 (international calls). If you have already paid the tax debt, send the payment receipt to the Notice CP508C address.

If you recently filed your current tax return and intend to repay it, the IRS will request a debt repayment. If the repayment is sufficient to seriously pay off your unpaid tax debt, the IRS considers the bill fully paid.


Passport status

The State Department will inform you in writing if the State Department rejects your US passport application or revokes your US passport.

Suppose you need a US passport to keep your job after the IRS certifies the unpaid tax debt with the Department of State. In that case, you must either pay your balance in full or enter into an alternative payment agreement to revoke your tax liability.


Impending travel plans

Suppose you are traveling early on an international trip. In that case, you need to resolve your passport issues and have a pending application for a US passport or passport renewal, and you should contact the IRS immediately. The IRS can help you settle your tax concerns and expedite the State Department's certification revocation. When expedited, the IRS can typically reduce processing time from 30 days to 14 to 21 days. You will need to notify the IRS that you have a trip planned within 45 days or that you are living abroad. And you are expected to provide the following documents to the IRS:

  • Copy of letter from state rejecting passport application or revoking passport. The state has the power to issue, restrict, refuse or revoke a passport.

  • Proof of travel: This could be a cruise ticket, international car insurance, flight itinerary, hotel reservation, or other document showing the approximate date and location of travel or the urgently needed passport.


FOR MORE INFORMATION ON HOW CARMEN GARCIA CAN BEST HELP YOU WITH YOUR TAX FILING NEEDS, PLEASE CLICK THE BLUE TAB ON THIS PAGE.


THANKS FOR VISITING.

Carmen Garcia
Contact Member