§7345 Revocation or Denial of Passport in Case of Certain Tax Delinquencies

Summary

If the IRS says a person has a seriously delinquent tax debt, the Treasury must send that notice to the State Department so the person’s passport can be denied, revoked, or limited under the FAST Act. A "seriously delinquent tax debt" means a legally enforceable federal tax bill that has been assessed, is greater than $50,000, and either has a filed tax lien with appeal rights finished or has been subject to a levy. It does not include debts that are being paid on an approved payment plan or settled by an offer, or debts where collection is paused because a due-process hearing is requested or innocent-spouse relief is sought. The IRS must tell Treasury and the State Department if a certification was wrong or if the debt is paid or no longer meets the rules. If the debt is paid or becomes unenforceable, that notice must be sent by the date the tax law requires for issuing a certificate of release of lien (section 6325(a)). Other notices must be sent within 30 days after an innocent-spouse election or request for relief, or within 30 days after a payment plan or offer-in-compromise is made. The IRS must tell the person at the same time and explain, in plain terms, the right to sue. The person can sue in U.S. district court or the Tax Court to challenge the certification; the court that gets the case first has sole authority. If the court finds the certification was wrong, it can order Treasury to tell the State Department. The IRS may only delegate the power to certify or reverse these cases to the Deputy Commissioner for Services and Enforcement or to a Commissioner of an IRS operating division. The $50,000 threshold is adjusted for cost-of-living increases for calendar years beginning after 2016 using the tax code’s adjustment method.