Understanding the Notice of Passport Action for Seriously Delinquent Debt

Introduction

The Internal Revenue Service (IRS) has the authority to certify individuals with 'seriously delinquent tax debt' to the State Department, which can impact their ability to obtain or renew a passport. This certification process is a consequence of the Fixing America's Surface Transportation (FAST) Act, enacted in December 2015. This article aims to provide a comprehensive understanding of what a Notice of Passport Action for Seriously Delinquent Debt entails, the implications for taxpayers, and the steps to resolve such issues.

What Constitutes Seriously Delinquent Tax Debt?

According to IRC § 7345, seriously delinquent tax debt is an individual's unpaid and legally enforceable federal tax debt totaling more than $55,000, including interest and penalties, which has been assessed and which a lien or levy has been filed against.

Exceptions and Exclusions

There are specific exceptions to what the IRS considers as seriously delinquent tax debt. These exceptions include:

• Debt being paid timely with an IRS-approved installment agreement.
• Debt being paid timely with an accepted offer in compromise.
• Debt being paid timely under a settlement agreement with the Justice Department.
• Collection of debt has been suspended by a request for innocent spouse relief.
• Collection due process hearing or equivalent proceeding result pending.

How Does the Certification Process Work?

Upon determination of a seriously delinquent tax debt, the IRS will certify the debt to the State Department, which can lead to denial of passport application or renewal, and in some cases, revocation of an existing passport. A Notice CP508C will be sent to notify the taxpayer of this certification. The IRS will also notify taxpayers when the certification is reversed with Notice CP508R.

Reversal of Certification

Certification can be reversed under the following circumstances:

• Taxes are fully paid with interest and penalties.
• Taxes are no longer legally enforceable.
• Debt falls under one of the exceptions listed above.
• The certification was found to be erroneous.

Implications of Seriously Delinquent Debt

The ability to travel freely with a valid passport is crucial for many. A Notice of Passport Action can severely hamper personal and professional travel plans. It is essential for taxpayers to address their outstanding debts promptly to avoid such consequences.

Actionable Steps to Resolve Delinquent Debt

• Review Your Tax Account: Log into the IRS portal and verify the accuracy of the reported debt.
• Set Up an Installment Agreement: Contact the IRS to set up a payment plan.
• Offer in Compromise: Consider negotiating a lower settlement on your tax debt.
• Request Innocent Spouse Relief: If applicable, request appropriate relief if the debt is tied to a spouse's actions.
• Seek Professional Help: Engaging a tax professional can provide guidance tailored to your specific situation.

Frequently Asked Questions

• Q1: Can a passport be used if already issued?

  A1: Yes, but future renewal may be denied until the debt is addressed.

• Q2: How long does certification take?

  A2: Certification remains until resolved, which can be expeditious once debts are paid or arrangements made.

• Q3: What if my certification was a mistake?

  A3: Contact the IRS immediately to correct errors in certification.

• Q4: Are there options for expediting my certification reversal?

  A4: Resolving the debt swiftly through payment or an agreement expedites the process.

• Q5: Can my passport be reinstated after revocation?

  A5: Yes, once certifying issues are resolved, you can apply for reinstatement.

• Q6: What should I do if I receive a Notice CP508C?

  A6: Address your tax debt immediately by contacting the IRS or seeking professional help.

• Q7: How do I contact a qualified tax professional?

  A7: Visit our professional help section on the dashboard for assistance.

For more detailed assistance, please visit our professional help section at /dashboard.