The State Department is barred from issuing a passport to any individual who has a seriously delinquent tax debt, and may revoke a passport previously issued to such an individual. The IRS Commissioner certifies tax delinquent status for this purpose. Notice, revocation of certification, and hardship exception rules apply.
A seriously delinquent tax debt is an unpaid, legally enforceable federal tax liability of an individual, provided that the liability:
has been assessed;
is greater than $50,000 (adjusted for inflation after 2016); and
with respect to which either:
a notice of lien has been filed, and the administrative rights with respect to the filing have been exhausted or have lapsed, or
a levy is made. Code Sec. 7345(b)(1), (f).
For calendar year 2018, the amount of a serious delinquent tax debt is $51,000. Rev. Proc. 2017-58, 2017-45 IRB 489. For calendar year 2017, the amount of a serious delinquent tax debt is $50,000. Rev. Proc. 2016-55, 2016-45 IRB 707.
Tax debts are excepted from this definitions in two situations:
the individual is paying the debt in a timely manner pursuant to an installment agreement or offer-in-compromise; or
the IRS collection action is suspended because of a collection due process hearing, or because innocent spouse relief has been requested or is pending. Code Sec. 7345(b)(2).
In addition, the Internal Revenue Manual (IRM) will be updated to include information about other circumstances under which a tax debt will not be subject to the certification process. The IRS will continue to monitor the certification process after implementation and may update the IRM if necessary to meet the requirements of the program. Notice 2018-1, 2018-3 IRB 299.
The Treasury Secretary is to transmit any certification of an individual’s seriously delinquent tax debt to the Secretary of State for action with respect to denial, revocation, or limitation of the individual’s passport. Code Sec. 7345(a).
The IRS Commissioner is to notify the Treasury Secretary and the Treasury Secretary is to then notify the Secretary of State, if the Commissioner’s certification is erroneous or if the debt with respect to such certification is fully satisfied or ceases to be a seriously delinquent tax debt because it falls under one of the exceptions. Code Sec. 7345(c)(1). The time frames for issuing the notice are as follows:
for a debt that has been fully satisfied or has become legally unenforceable, the deadline is the date required for issuing the certificate of release of lien with respect to such debt;
for an individual electing or requesting innocent spouse relief, the deadline is not later than 30 days after the election or request;
for a taxpayer paying under an installment agreement or an offer-in-compromise, the deadline is not later than 30 days after the agreement is entered into or the offer is accepted by the Treasury Secretary; and
for certifications found to be erroneous, the deadline is as soon as practicable after the finding. Code Sec. 7345(c)(2).