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IRS Passport Restrictions
The IRS recently resumed its passport restrictions certification program whereby it notifies the State Department if a taxpayer has seriously delinquent tax debt. In such case, the State Department will deny, revoke, or refuse to renew the taxpayer’s passport, thereby restricting any international travel.
The tax attorneys at Segal, Cohen & Landis have successfully handled hundreds of decertification cases and have helped our clients get irs passport restrictions lifted in a timely manner while also resolving the underlying tax liability. We have also secured expedited decertification on behalf of clients with imminent international travel plans.
Tax Debt Subject to Certification as Seriously Delinquent
The IRS will certify a tax debt as seriously delinquent if:
- Taxpayer has an unpaid, legally enforceable tax debt totaling more than $55,000* (adjusted yearly for inflation) and
- Notice of Federal Tax Lien has been filed and all administrative remedies under the law have lapsed or been exhausted or
- Notice of Levy has been issued.
The tax debt may include individual income tax, Trust Fund Recovery Penalties, business taxes for which the individual liable, and other civil penalties.
In simple terms, in order for your tax debt to affect your ability to travel internationally, you have to owe more than $55,000, the IRS must have already pursued formal collection action against you, and none of the exceptions discussed in the next section Tax Debt Excluded from Certification apply.
Tax Debt Excluded from Certification
The IRS acknowledges that some types of tax debt are not subject to certification as seriously delinquent, including but not limited to tax debt:
- Associated with FBAR Penalties (Report of Foreign Bank Account and Financial Account)
- Associated with child support
- Getting paid pursuant to an IRS accepted installment agreement or offer in compromise
- Getting addressed pursuant to an IRS approved administrative remedy such as a request for collection due process hearing or request for innocent spouse relief
- Where taxpayer has a pending installment agreement or pending offer in compromise with the IRS
- Where taxpayer is in bankruptcy
- Where taxpayer has been identified by the IRS as being a victim of identity theft
- Where the IRS has placed taxpayer’s account in currently not collectible status
- Where taxpayer lives in a federally declared disaster area
- Where taxpayer is serving in a combat zone
Notice of Certification to the Taxpayer and Timelines
When the IRS certifies a tax debt as seriously delinquent to the State Department, it also sends the taxpayer a Notice 508C. Before the State Department denies a passport renewal or a new passport application, the taxpayer will generally have 90 days to:
- Full pay the liability,
- Resolve any erroneous certification errors, or
- Set up resolution for the outstanding liability.
The IRS may ask the State Department to revoke a taxpayer’s passport if, for example, the IRS had previously reversed certification because of taxpayer’s promise to pay however taxpayer never paid. In these cases, the taxpayer will have 30 days to contact the IRS and resolve the account to prevent revocation.
If taxpayer is overseas after the IRS has certified tax debt as seriously delinquent, the State Department may issue a limited validity passport good for direct return to the United States so that taxpayer can resolve their account.
The State Department will notify the taxpayer in writing if it denies a U.S. passport application or revokes a U.S. passport.
Passport Restrictions: Why You Need an SCL Tax Attorney
There are several ways to force a decertification of seriously delinquent tax debt and get passport restrictions lifted, even if you cannot pay the taxes owed in full. The attorneys at Segal, Cohen & Landis have helped hundreds of clients get passport restrictions lifted a variety of ways, including but not limited to:
- Setting up an installment agreement (even a pending installment agreement will trigger decertification)
- Submitting an offer in compromise (even a pending offer in compromise will trigger a decertification)
- Establishing currently not collectible status (without regard to filing compliance)
- Filing a timely request of a collection due process hearing (which also suspends collection activity)
- Filing a proper request for innocent spouse relief when warranted under IRC 6015
- Negotiating an agreement to full pay the liability by a specified pay-off date
- Successfully challenging an erroneous certification
We note that in most cases the taxpayer must be filing compliant (current on the filing of any missing tax returns) in order to set up resolution and force a decertification.
The IRS makes a reversal of certification within 30 days once it establishes that
- The tax debt is fully satisfied or becomes legally unenforceable,
- The tax debt is no longer seriously delinquent (decertification), or
- The certification is erroneous.
The IRS will notify the State Department of the reversal as soon as practicable and send taxpayer Notice 508R. Without proper counsel, it can take up to 60 days for the passport restrictions to get lifted following a reversal of certification of seriously delinquent tax debt.
The experienced tax attorneys at Segal, Cohen & Landis understand the rules regarding expedited decertification and have helped clients with imminent international travel plans resolve passport issues in an expedited manner shortening the IRS processing time by 14 to 21 days. In order to qualify, taxpayer must provide proof of international travel within 45 days or proof of residence abroad.
A request for expedited decertification must be substantiated with specific documentation and is only granted under exceptional circumstances. We recommend that you consult with one of our tax attorneys if you are interested in finding out whether you are a candidate for expedited decertification.
See What the IRS Has to Say About Passport Restrictions:
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