Revocation or Denial of Passport in Case of Certain Unpaid Taxes

Revocation or Denial of Passport in Case of Certain Unpaid Taxes

Can the IRS Really Revoke my Passport?

Section 7345 of the Internal Revenue Code (Code), enacted by Section 32101 of Fixing America’s Surface Transportation (FAST) Act, Pub. L.114–94, on December 4, 2015, requires the Department of the Treasury (Treasury) to notify the Department of State (State Department) if a certification is made that an individual has a “seriously delinquent" tax debt.

Under section 7345(b)(1), a “seriously delinquent tax debt” is an unpaid, legally enforceable, and assessed federal tax liability of an individual, greater than $50,000 (including penalties and interest), and for which:

A notice of federal tax lien has been filed under section 6323, and the taxpayer’s right to a hearing under section 6320 has been exhausted or lapsed; or
A levy has been issued under section 6331.

Pursuant to section 7345(f), the $50,000 amount is adjusted for the cost of living adjustment each calendar year beginning after 2016, and shall be rounded to the nearest multiple of $1,000.

Section 7345(b)(2) provides that a seriously delinquent tax debt does not include the following:

A debt that is being timely paid under an IRS-approved Installment Agreement under section 6159;
A debt that is being timely paid under an offer in compromise accepted by the IRS under section 7122;
A debt that is being timely paid under the terms of a settlement agreement with the Department of Justice under section 7122;
A debt in connection with a levy for which collection is suspended because of a request for a due process hearing (or because such a request is pending) under section 6330; and
A debt for which collection is suspended because the individual made an innocent spouse election (section 6015(b) or (c)) or the individual requested innocent spouse relief (section 6015(f)).

Additionally, a passport won’t be at risk under this program for any taxpayer:

Who is in bankruptcy
Who is identified by the IRS as a victim of tax-related identity theft
Whose account the IRS has determined is Currently Not Collectible due to a hardship
Who is 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
Who has an adjustment that will satisfy the debt in full.
While an individual is serving in a designated combat zone or participating in a contingency operation.

IRS is Required to Provide Notification

The IRS shall contemporaneously notify an individual of any certification under subsection (a), or any reversal of certification under subsection (c), with respect to such individual. Such notice shall include a description in simple and nontechnical terms of the right to bring a civil action under subsection (e).

You Have the Right to Seek Legal Remedies

After the IRS notifies an individual under subsection (d), the taxpayer may bring a civil action against the United States in a district court of the United States, or against the IRS (Commissioner) in the Tax Court, to determine whether the certification was erroneous or whether the IRS (Commissioner) has failed to reverse the certification. For purposes of the preceding sentence, the court first acquiring jurisdiction over such an action shall have sole jurisdiction.

Before denying a passport, the State Department will typically grant a 90 day hold to allow you to:

Resolve any erroneous certification issues
Make full payment of the tax debt or pay it below the threshold
Enter a satisfactory payment arrangement with the IRS

Can You File Suit Against the State Department for an Erroneous Notification or Decertification?

The State Department is held harmless in these matters and cannot be sued for any erroneous notification or failed decertification under IRC § 7345. IRC § 7345 does not provide the court authority to release a lien or levy or award money damages in a suit to determine whether a certification is erroneous. You are 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.

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