The IRS has now posted a notice on its website indicating that it has began sending certifications of unpaid tax debt to the State Department in February 2018. Americans with seriously delinquent tax debt (totaling more than $51,000 (including interest and penalties) , per IRC § 7345 will be certified as such to the State Department for action. The State Department reportedly will not issue passports to to individuals after receipt of certification from the IRS.
Back in December 2015, we first reported in this blog about the “Fixing America’s Surface Transportation Act,” or “FAST Act” which includes Section 7345 that provides for the revocation or denial of U.S. passports to applicants with certain tax delinquencies considered ‘seriously delinquent tax debt’ –that is, a tax liability that has been assessed, which is greater than $50,000 and a notice of lien has been filed. That law was passed and the IRS was supposed to start certifying in early 2017 but that did not happen.
- IRS to Start Certifying Unpaid Taxes of $50K+ in Early 2017 For Revocation/Denial of US Passports | Feb 2017
- New Law Authorizes Revocation or Denial of U.S. Passports to Certain Tax Delinquents | Dec 2015
According to the recent IRS notice, upon receiving certification, the State Department shall deny the tax delinquent individual’s passport application and/or may revoke his/her current passport. If the passport application is denied or the passport is revoked while said individual is overseas, the State Department may issue a limited validity passport but only for direct return to the United States. Read more here via IRS.gov
- Certification Of Individuals With Seriously Delinquent Tax Debt
- Annual Adjustment For Inflation
- Taxpayer Notification – Notice CP 508C
- Reversal Of Certification – Notice CP 508R
- Judicial Review Of Certification
- Payment Of Taxes
- Passport Status
Note that the guidance also says that the State Department is held harmless in these matters and cannot be sued for any erroneous notification or failed decertification under IRC § 7345. Affected individuals 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 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 State Department’s statement on this issue is available here with IRS contact details.