Understanding the Notice of Passport Action for Seriously Delinquent Tax Debt

Introduction

The U.S. Internal Revenue Service (IRS) has several tools at its disposal to enforce tax compliance, including the issuance of a Notice of Passport Action for Seriously Delinquent Debt. This notice can have significant ramifications on your ability to travel internationally. Understanding the details and implications of this notice is crucial for managing and resolving your tax issues effectively.

What is a Seriously Delinquent Tax Debt?

According to IRC Section 7345, a seriously delinquent tax debt is an unpaid, legally enforceable federal tax liability that totals more than $54,000, including interest and penalties, and for which:

• A notice of federal tax lien has been filed and all administrative remedies under IRC Section 6320 have lapsed or been exhausted.
• A levy has been issued under IRC Section 6331.

Implications of the Notice of Passport Action

When the IRS certifies a taxpayer as having a seriously delinquent tax debt, the certification is transmitted to the U.S. Department of State. The State Department will then either deny a passport application or renewal or may revoke a current passport. This action effectively restricts international travel until the debt is resolved.

Criteria for Certification

Not all tax debts surpassing $54,000 result in passport action. Exceptions include taxpayers who:

• Are in bankruptcy.
• Are victims of tax-related identity theft.
• Have made a satisfactory arrangement to pay with the IRS through an installment agreement or offer in compromise.
• Have requested a collection due process hearing regarding a levy on their tax debt.
• Have had a levy released due to economic hardship.

How to Resolve Seriously Delinquent Tax Debt

1. Pay the Debt in Full

The most straightforward way to address this issue is to pay off the debt completely. Doing so will lead to the decertification of your case with the IRS and the removal of the restriction by the Department of State.

2. Enter into an Installment Agreement or Offer in Compromise

If paying in full isn’t feasible, negotiate a payment plan or a settlement with the IRS. Entering into an IRS-approved installment agreement or successfully negotiating an offer in compromise can halt the passport certification process.

3. Address Lien or Levy Issues

Challenge the lien or levy that contributed to the certification. If you successfully resolve an appeal, the IRS may lift the certification.

How to Challenge a Certification

If you believe your certification is incorrect, you have the right to file a lawsuit in the U.S. Tax Court or a U.S. District Court to have the certification reversed.

Actionable Steps

• Review all IRS correspondence carefully to understand the nature and status of your tax debt.
• Consider consulting a tax professional to explore payment arrangements or appeal options.
• Monitor the IRS website or contact the IRS directly for the status of your case and possible resolutions.
• Prepare for potential litigation if incorrectly certified and seek professional legal advice.

Conclusion

The Notice of Passport Action for Seriously Delinquent Debt can greatly impact your freedom to travel. It’s essential to promptly address such notices and seek appropriate resolutions through payment or negotiation with the IRS. Ignoring the issue can lead to complications, including the loss of your passport. For personalized assistance, visit /dashboard to connect with a professional.