A new provision found in Section 7345 of the United States Tax Code gives the IRS the power to recommend that the State revoke, deny, or limit passports of identified taxpayers with delinquent federal tax debt exceeding $50,000. Disputed assessments that are still pending in court or in certain types of negotitations with the IRS are not covered by the revocation provision.
Coverage of Revocation Power
The new law does not apply to all delinquent taxpayers, only to those with “serious delinquent tax debt” who are certified by the Commissioner of Internal Revenue as such. A tax debt is deemed “serious” for purposes of revocation or limitation of passport if:
- It is a federal tax liability
- The assessed value exceeds $50,000, including interest and penalties
- The IRS has filed a notice of lien and has made a levy pursuant to relevant provisions of the Tax Code
The new law excludes certain cases from being subject of revocation, such as:
- A tax debt that is timely paid following terms of an agreement with the IRS
- A debt with suspended collection due to a requested or pending due process hearing
- Emergency or humanitarian situations
Remedies for Reversing the Passport Revocation
If the IRS notifies you that it has certified your tax liability as serious and delinquent and has requested for your passport’s revocation, you may be still be able to reverse the revocation by any of the following means:
- Full settlement of your tax debt
- Entering into an instalment agreement or offer-in-compromise with the IRS
- Filing a request for innocent spouse relief
- Challenging the revocation in a civil court case against the government, raising the defense that the certification was erroneous or that the IRS Commissioner failed to reverse a certification that was earlier declared as erroneous
The IRS takes its tax collection efforts very seriously and its latest power of certifying taxpayers for passport revocation is expected to add more teeth to existing IRS efforts. If you receive notices or correspondence from the IRS, it’s important to read those notices and immediately consult with an IRS tax attorney for advice and representation.
Taxpayers in Tyler, Texas can approach any of the attorneys at the Scammahorn Law Firms, P.C. for legal advice and representation in tax litigation, IRS audits, or for help with any IRS issue. Let us help you by calling any of our attorneys at (903) 595-1000 for a confidential consultation.