The IRS has updated its online frequently asked questions (FAQs) about passport certification. Code Sec. 7345 authorizes the IRS to certify that a taxpayer has seriously delinquent tax debt to the U.S. State Department.
The IRS website reports that passport certifications will begin in early 2017. Speaking at the May Meeting of the American Bar Association Section of Taxation in Washington, D.C., an IRS official declined to provide a more specific timeframe or predict when official guidance would be released. The official referred taxpayers to the online FAQs.
The FAST Act requires the IRS to notify an affected taxpayer in writing at the time the agency certifies seriously delinquent tax debt. The IRS explained on its website that it is using Notice CP 508C for this purpose.
The updated FAQ informs taxpayers who need to resolve passport issues that they should call the phone number listed on their Notice CP 508C. If the taxpayer already has a U.S. passport, the taxpayer may be allowed to travel until he or she is notified by the State Department, the IRS explained. In addition, once a taxpayer is certified and his or her passport is cancelled or revoked, the certification will be reversed if the taxpayer resolves the tax debt, makes alternate payment arrangements or shows that he or she received the certification by mistake, the IRS explained.
In 2015, Congress added Code Sec. 7345 as part of the Fixing America’s Surface Transportation Act of 2015 (FAST Act). Upon receiving certification of seriously delinquent tax debt from the IRS, the FAST Act directs the State Department to deny an individual’s passport application and/or to revoke the individual’s current passport.
The IRS has explained on its website that seriously delinquent tax debt is an individual’s unpaid, legally enforceable federal tax debt totaling more than $50,000 (including interest and penalties) for which a notice of federal tax lien has been filed and all administrative remedies under Code Sec.6320 have lapsed or been exhausted; or levy has been issued. The $50,000 threshold is indexed for inflation after 2016.
Some tax debt is excluded from determining seriously delinquent tax debt, such as tax liabilities being paid in a timely manner under an installment agreement or offer in compromise. Tax debt for which a collection due process hearing is timely requested in connection with a levy to collect the debt or for which collection has been suspended because a request for innocent spouse relief has been made also is excluded from determining seriously delinquent tax debt.