The IRS ability to deny or revoke the passports of taxpayers with “seriously delinquent tax debt” is a serious problem currently being encountered by U.S. taxpayers.

If under Internal Revenue Code Section (IRC) 7345, the Internal Revenue Service (IRS) has identified a taxpayer's federal income tax debt as seriously delinquent, the IRS is authorized to certify a taxpayer's seriously delinquent federal income tax debt to the State Department for the purpose of denying a U.S. taxpayer's passport application or revoking a U.S. taxpayer's current passport.

IRC Section 7345 defines seriously delinquent tax debt as:

  • An “unpaid, legally enforceable federal tax liability of an individual,” which has been assessed;
  • Is greater than $50,000 (adjusted for inflation); and meets either of the following criteria:
  • A notice of lien has been filed under IRC Section 6323 and the Collection Due Process (CDP) hearing rights under IRC Section 6320 have been exhausted or lapsed; or (2) A levy has been made under IRC Section 6331.

Taxpayers Are Notified Via IRS Notice CP508C

The IRS is required to notify taxpayers in writing at the time that the IRS certifies seriously delinquent tax debt to the U.S. State Department. IRS sends written notices by regular mail to the taxpayer's last known address. A taxpayer's power of attorney (POA) representative does NOT receive a copy of the CP508C.

Approximately 270,000 Taxpayers Meet the Criteria

The 2017 National Taxpayer Advocate “Annual Report to Congress,” acknowledges that the implementation of this law denying or revoking the passports of taxpayers with seriously delinquent tax debt is a grave problem. The report estimates that approximately 270,000 taxpayers meet the criteria for a seriously delinquent tax debt.

Taxpayers Should Act Before IRS Notifies the State Department

U.S. taxpayers that arrange payment of their seriously delinquent tax debt before the IRS notifies the U.S. Department of State stand to achieve a better outcome regarding the potential revocation or denial of U.S. passports because of unpaid taxes.