From Helsell Fetterman In 2015, Congress passed the Fixing America’s Surface Transportation (FAST) Act, which requires the State Department to deny an individual’s passport application and revoke or limit an individual’s passport if the IRS has certified to the State Department that the individual has a “seriously delinquent tax debt.” After several years of non-enforcement, the IRS appears poised to finally act within the full scope of its authority, beginning in late February or March 2018. The terms of this authority are memorialized in Internal Revenue Code (I.R.C.) section 7345. Beginning soon, the IRS will begin sending Notice 508C to taxpayers with seriously delinquent tax debt at the same time it certifies the tax debt to the State Department that the individual is seriously delinquent on his or her taxes. If an individual certified as having a seriously delinquent tax debt applies for a passport or a passport renewal, the State Department will hold the application of the certified taxpayer for 90 days to allow the taxpayer to resolve any certification issues, make a full payment of the tax debt, or enter into a satisfactory payment alternative (discussed below) before officially denying an application for a passport renewal. For U.S. citizens with existing passports and a seriously delinquent tax debt, the State Department may revoke or limit those individuals’ passports. For individuals who travel for work, this could have severe consequences. Seriously Delinquent Tax Debt Congress has defined a seriously delinquent tax debt to mean an unpaid, legally enforceable federal tax liability, including penalties and interest, of an individual which has been assessed and is greater than $50,000 (adjusted for inflation and currently at $51,000 for 2018). Additionally, for certification to occur, the tax liability or liabilities must have resulted:
- A Notice of Federal Tax Lien, under I.R.C. section 6323, being filed by the IRS and all the corresponding appeals rights under I.R.C. section 6320 exhausted or lapsed; or
- A levy under I.R.C. section 6331.