If you have seriously delinquent tax debt, IRC § 7345 authorizes the IRS to certify that to the State Department. The department generally will not issue or renew a passport to you after receiving certification from the IRS.
IRS website has more information on the following topics:
Certification Of Individuals With Seriously Delinquent Tax Debt
Annual Adjustment For Inflation
Taxpayer Notification - Notice CP 508C
Reversal Of Certification - Notice CP 508R
Judicial Review Of Certification
Payment Of Taxes
Passport Status
Travel
Upon receiving certification, the State Department may revoke your passport. If the department decides to revoke it, prior to revocation, the department may limit your passport to return travel to the U.S.
Certification Of Individuals With Seriously Delinquent Tax Debt
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 IRC § 6320 have lapsed or been exhausted or
Levy has been issued
Some tax debt is not included in determining seriously delinquent tax debt even if it meets the above criteria. It includes tax debt:
Being paid in a timely manner under an installment agreement entered into with the IRS
Being paid in a timely manner under an offer in compromise accepted by the IRS or a settlement agreement entered into with the Justice Department
For which a collection due process hearing is timely requested in connection with a levy to collect the debt
For which collection has been suspended because a request for innocent spouse relief under IRC § 6015 has been made
Before denying a passport, the State Department will hold your application for 90 days to allow you to:
Resolve any erroneous certification issues
Make full payment of the tax debt
Enter into a satisfactory payment alternative with the IRS
There is no grace period for resolving the debt before the State Department revokes a passport.
Annual Adjustment For Inflation
*The $50,000 threshold is indexed yearly for inflation
Under new Code Section 7345(f), in the case of a calendar year beginning after 2016, the dollar amount in new Code Section 7345 shall be increased by an amount equal to (1) such dollar amount, multiplied by (2) the cost-of-living adjustment determined under Code Section 1(f)(3) for the calendar year, determined by substituting “calendar year 2015” for “calendar year 1992” in Code Section 1(f)(3)(B). If any amount as adjusted under the preceding sentence is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000.
Taxpayer Notification - Notice CP 508C
The IRS is required to notify you in writing at the time the IRS certifies seriously delinquent tax debt to the State Department. The IRS is also required to notify you in writing at the time it reverses certification. The IRS will send written notice by regular mail to your last known address.
Reversal Of Certification - Notice CP 508R
The IRS will notify the State Department of the reversal of the certification when:
The tax debt is fully satisfied or becomes legally unenforceable.
The tax debt is no longer seriously delinquent.
The certification is erroneous.
The IRS will provide notice as soon as practicable if the certification is erroneous. The IRS will provide notice within 30 days of the date the debt is fully satisfied, becomes legally unenforceable or ceases to be seriously delinquent tax debt.
A previously certified debt is no longer seriously delinquent when:
You and the IRS enter into an installment agreement allowing you to pay the debt over time.
The IRS accepts an offer in compromise to satisfy the debt.
The Justice Department enters into a settlement agreement to satisfy the debt.
Collection is suspended because you request innocent spouse relief under IRC § 6015.
You make a timely request for a collection due process hearing in connection with a levy to collect the debt.
Passport Status
If you need to verify whether your U.S. passport has been cancelled or revoked, you should contact the State Department by calling the National Passport Information Center at 877-487-2778.
If you need your U.S. passport to keep your job, once your seriously delinquent tax debt is certified, you must fully pay the balance, or make an alternative payment arrangement to keep your passport.
Once you’ve resolved your tax problem with the IRS, the IRS will reverse the certification within 30 days of resolution of the issue.
Travel
If you’re leaving in a few days for international travel and need to resolve passport issues, you should call the phone number listed on Notice CP 508C. If you already have a U.S. passport, you can use your passport until you’re notified by the State Department that it’s taking action to revoke or limit your passport.
If the Secretary of State decides to revoke a passport, the Secretary of State, before making the revocation, may—
(a) Limit a previously issued passport only for return travel to the United States;
or
(b) Issue a limited passport that only permits return travel to the United States.
If your passport is cancelled or revoked, after you’re certified, you must resolve the tax debt by paying the debt in full, making alternative payment arrangements or showing that the certification is erroneous.
The IRS will notify the State Department of the reversal of your certification within 30 days of the date the tax debt is resolved
The IRS will not reverse certification where a taxpayer requests a collection due process hearing or innocent spouse relief on a debt that is not the basis of the certification. Also, the IRS will not reverse the certification because the taxpayer pays the debt below $50,000.
Judicial Review Of Certification
If the IRS certified your debt to the State Department, you can file suit in the U.S. Tax Court or a U.S. District Court to have the court determine whether the certification is erroneous or the IRS failed to reverse the certification when it was required to do so. If the court determines the certification is erroneous or should be reversed, it can order reversal of the certification.
IRC § 7345 does not provide the court authority to release a lien or levy or award money damages in a suit to determine whether a certification is erroneous. You are not required to file an administrative claim or otherwise contact the IRS to resolve the erroneous certification issue before filing suit in the U.S. Tax Court or a U.S. District Court.
Payment Of Taxes
If you can’t pay the full amount you owe, you can make alternative payment arrangements such as an installment agreement or an offer in compromise and still keep your U.S. passport.
If you disagree with the tax amount or the certification was made in error, you should contact the phone number listed on Notice CP 508C. If you’ve already paid the tax debt, please send proof of that payment to the address on the Notice CP 508C.
If you recently filed your tax return for the current year and expect a refund , the IRS will apply the refund to the debt and if the refund is sufficient to satisfy your seriously delinquent tax debt, the account is considered fully paid.