IN February 2018, the IRS started certification of individuals with delinquent tax debt to the State Department.
How will the IRS certification impact you?
• Upon receipt of certification. The State Department will either deny application or revoke current passport or both.
• You are overseas. Limited validity passport for direct return to the US maybe issued by the State Department if you are overseas.
• Serious elinquent ax debt. IRS tax debt of more than $51,000 inclusive of penalties plus interest for which all administrative remedies under IRC § 6320 has been exhausted, and federal tax lien and levy notices have already been issued. Liabilities limited under Title 26 of the United States Code.
• Tax debt not considered serious. A tax debt is not considered serious if there is: a) installment agreement; b) offer in compromise; c) timely collection due process hearing related to the levy; d) innocent spouse relief under IRC § 6015 has been requested and collection is suspended; e) under settlement agreement with Justice Department.
• 90-day hold of application. You will be given 90-days to resolve and enter into payment options with IRS to resolve certification issues by the State Department and will hold your application prior to denial of passport application.
• Be aware of Notice CP 508C. You will receive notice CP 508C upon certification of IRS to the State Department of serious tax debt, by mail.
• Certification reversal CP 508R. The State Department will be notified within 30-days by the IRS to reverse previous certification of serious tax debt once assessed tax debt is no longer serious in 3. above, no longer enforceable, and or due to erroneous certification.
• Certified debt no longer seriously delinquent. The certified debt previously delinquent is no longer delinquent when: 1) there is timely request for collection due process; 2) has been suspended due request of innocent spouse relief under IRS § 6015; 3) the IRS accepts the installment agreement or offer an in compromise.
• IRC § 7345 failed or error in certification and notification. You cannot sue the State Department for erroneous notification. You may file a suit in the U.S. Tax Court and have the court determine if the certification is erroneous and order the IRS to notify the State Department of the erroneous certification. The court does not have authority to release a lien, levy, or award for damages.
• Passport application is denied. You will be notified in writing by the State Department if your passport application is denied or revoked.
• You owe taxes and cannot pay in full. Apply for installment agreement or offer in compromise if you qualify, to reverse the certification and for issuance of passport.
• Disagreement with the tax amount. Call the number provided on notice CP 508C: 1-866-519-4965; for international callers: 1-267-941-1004. For proof of payment, mail to the address on the notice.
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Disclaimer: Any accounting, business or tax advice contained in this communication is neither intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.
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Al-os & Associates Accountancy Corporation provides accounting and tax services to individuals, corporations, LLCs and business entities. The Firm has a niche in defending taxpayers audited by the IRS and other governmental agencies.