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The Tax Practice of IIT Chicago-Kent College of Law
The Tax Practice of IIT Chicago-Kent College of Law


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IRS Enforcement Now Preventing Passport Renewals

Posted on in Tax Rants

Making plans to travel internationally for the winter break? Needing to attend a business conference in Venice? Got tickets to the Radiohead concert in Toronto?

If you owe a significant sum to the IRS, you may be in for a rude surprise. Recent implementation of enforcement policies is resulting in lots of delinquent taxpayers receiving notices that their application for a new passport will be denied or existing passport not renewed.

On December 4, 2015, the Fixing America’s Surface Transportation Act (“FAST act) became a law, and it created a new Internal Revenue Code section § 7345 which requires the IRS to notify the State Department when an individual is certified as owing a “seriously delinquent tax debt”.

The first alarm rang on January 16, 2018, when the IRS published a Notice explaining the new rules. Additional important details were also added to the Internal Revenue Manual. On January 22, 2018, after the implementation of the passport program, the IRS took its first steps.

To be considered a “seriously delinquent tax debt”, there must be an assessed and unpaid amount of $50,000 or more, and the IRS has filed a notice of lien or a levy was issued. The section provides statutory exceptions for current installment agreements, offers in compromise, and Collection Due Process hearings. Several other exceptions are available as well. The IRS will send a form to a taxpayer after it certifies the seriously delinquent tax debt.

The taxpayer may bring a civil action against the United States in a district court of the United States, or in the U.S. Tax Court, to determine whether the certification was erroneous, or whether the Commissioner has failed to reverse the certification.

If you have received one of these alarming notices, or if you are planning on renewing your passport and haven’t taken care of an outstanding IRS debt, we encourage you to contact our office to discuss and develop a strategy to solve the underlying problem.

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