Every year, thousands of people take trips to destinations outside of the United States, and the purpose of their journeys vary—business, an exotic vacation, a desire to explore the remnants of past cultures, an admiration for medieval architecture, a religious pilgrimage to a holy city, etc. Most international travel requires the use of a passport. While most people are aware that the IRS can levy bank accounts, issue liens for property, and garnish wages, did you know the IRS can also effectively take away your passport?
Passport Loss: Certification of Debt
On December 4, 2015, Congress enacted Internal Revenue Code section 7345, as part of the Fixing America’s Surface Transportation (FAST) Act. Essentially, the FAST Act requires the IRS to certify a seriously delinquent tax debt to the State Department. In turn, the act prevents the State Department from issuing or renewing your passport. The FAST Act defines a seriously delinquent tax debt as an unpaid, legally enforceable federal tax debt of more than $50,000.00 for an individual. However, the IRS must take certain actions before notifying the State Department: 1) the IRS must notify you of the date of certification, 2) The IRS must file a Notice of Federal Tax Lien, and 3) the IRS must allow you to first exhaust all other collection remedies, including disputing the collection action in a Collection Due Process hearing.
Not only can the State Department decline issuing or renewing a passport once it’s been alerted, it can also revoke your passport or limit your ability to travel outside of the United States. If this happens when you are overseas, the State Department can issue a limited validity passport, which is only good for a direct return to the U.S.
Passport Return: Reversal of Certification
This may seem like a scary situation, but certification is reversible once the IRS no longer considers the debt seriously delinquent. This can be remedied by entering into an installment agreement with the IRS, the IRS accepting an offer in compromise, the Justice Department accepting a settlement agreement, requesting innocent spouse relief if applicable, or making a timely request for a Collection Due Process hearing regarding a levy to collect a debt. The IRS has 30 days to reverse the certification and alert the State Department of the reversal. However, the IRS will not reverse the certification if the tax is merely paid below $50,000.00.
If you are alerted by Notice CP 508C that the IRS has identified your tax debt as meeting the definition of “seriously delinquent,” you need to take action immediately to resolve the matter. However, you may still use your passport until the State Department notifies you that it’s been revoked. You should call the IRS via the number on your notice as soon as possible to resolve your tax matter.
Robert V. Boeshaar Attorney at Law, LL.M.,PLLC
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