What to Do if the IRS Revokes or Denies Your Passport Over Back Taxes
When a taxpayer owes significant back taxes, the consequences can go far beyond penalties and interest. Under federal law, the IRS can certify your tax debt as “seriously delinquent” and request that the U.S. Department of State deny, revoke, or limit your passport.
This authority comes from 26 U.S.C. § 7345, which Congress enacted as part of the Fixing America’s Surface Transportation Act (FAST Act) in 2015. Under Section 7345, the IRS Commissioner may certify an individual as having a “seriously delinquent tax debt” if the following are true:
- The federal tax liability has been assessed;
- The total amount exceeds $50,000, adjusted for inflation;
- The debt is unpaid and legally enforceable; and
- The IRS has filed a lien notice or completed a levy, and all administrative appeal rights have been exhausted or lapsed.
Once the IRS makes this certification, the Secretary of the Treasury transmits it to the Secretary of State, who may deny, revoke, or limit the taxpayer’s passport. Under Section 7345(d), the IRS Commissioner must also notify the taxpayer of the certification.
What Can You Do After Receiving an IRS Certification Notice?
A taxpayer who receives this notice has both court-based and administrative options to challenge the certification.
Taxpayer’s Court Options
A taxpayer can proceed to the U.S. Tax Court or an appropriate federal district court to challenge the IRS certification of “seriously delinquent tax debt.” The key issues the court will review are:
- Whether the taxpayer has already paid the tax debt or planned for payment
- Whether the tax debt is legally unenforceable; or
- Whether the IRS failed to provide proper notice of the tax liability or notice of the certification
Remember, courts cannot review the underlying tax liability in a passport revocation case. The court’s jurisdiction is limited to determining whether the IRS certification of “seriously delinquent” was erroneous or whether the IRS failed to reverse such certification that it was legally required to withdraw.
If the court finds the IRS certification improper, it may order the Secretary of the Treasury to notify the Secretary of State that the certification was erroneous. However, no other relief is available under 26 U.S.C. § 7345(e)—the court cannot order passport reinstatement directly.
The FAST Act of 2015 outlines the process for certifying delinquent tax debt and the resulting consequences for passport issuance and revocation. While courts do not review the legitimacy of the tax, the tax must fall within the ten-year collection statute. Under 26 U.S.C. § 6502, the IRS has ten years from the date of assessment to collect a tax debt. A certification must therefore concern a tax that is collectible at the time the IRS Commissioner makes the “seriously delinquent” determination. A tax debt outside that ten-year window is not legally enforceable, which can serve as a strong legal defense in passport revocation cases.
Taxpayer’s Out-of-Court Options
Litigation is not always the best or only option for resolving a passport certification problem. In many situations, it’s more practical for taxpayers to negotiate directly with the IRS to reverse a certification through one of several administrative remedies.
For example, taxpayers can enter into an installment agreement or offer in compromise with the IRS. These agreements immediately remove the debt from the definition of “seriously delinquent tax debt.” Once such an agreement is in place, the IRS is required to notify the State Department to reverse the certification.
Taxpayers may also request a Collection Due Process Hearing (CDP) hearing, which can temporarily suspend enforcement actions and provide an opportunity to challenge the certification. A CDP hearing allows the taxpayer to discuss collection alternatives, present new evidence, or assert procedural errors by the IRS.
Other equitable relief may also be available, depending on the taxpayer’s circumstances. For example, a taxpayer could seek innocent spouse relief or other humanitarian-based exceptions that affect collectability or fairness of the tax debt.
These administrative approaches—whether pursued before or after the IRS certification—can resolve the issue more quickly than formal litigation.
Practical Considerations
Let’s be practical. The process for challenging or reversing a passport certification can be complex, and timing is critical. The IRS and State Department do not move quickly, and travel restrictions can disrupt your business, family, and personal plans.
Taxpayers facing certification under § 7345 should act immediately upon receiving notice. Whether the proper strategy is litigation, negotiation, or administrative appeal depends on the taxpayer’s facts and circumstances.
An experienced tax controversy attorney can evaluate whether the certification was valid, help the taxpayer pursue a court challenge, and negotiate directly with the IRS to seek reversal of the certification and restoration of passport privileges.
This law blog is written by attorneys at Coleman Jackson, P.C., located at 6060 North Central Expressway, Suite 620, Dallas, Texas 75206, for educational purposes only. It does not create an attorney-client relationship between this law firm and the reader. You should consult with legal counsel in your geographic area regarding any legal issues impacting you, your family, or business.
Coleman Jackson, P.C. | Tax Law, Business Law, Immigration Law | English: (214) 599-0431 | Spanish: (214) 599-0432
