Updated: Jun 16
Revocation or Denial of Passport in Case of Certain Unpaid Taxes under §7345
§7345 was enacted as part of the 2015 Fixing America’s Surface Transportation act (FAST). The IRS will certify to the State Department those Taxpayers with a ‘seriously delinquent tax debt’ and the State Department is then authorized to:
· Deny applications for a passport,
· Revoke a current passport, or
· If the taxpayer is overseas, they may issue a limited validity passport good only for direct return to the US.
A seriously delinquent tax debt under §7345(b)(1) is an individual's unpaid, legally enforceable federal tax debt (including interest and penalties) totaling more than $54,000 (adjusted yearly for inflation) for which a:
· Notice of federal tax lien has been filed and all administrative remedies under the law have lapsed or have been exhausted, or
· Levy has been issued.
The IRS will notify the taxpayer of the certification with Notice CP508C, ‘Notice of Certification of Your Seriously Delinquent Federal Tax Debt to the State Department’.
Some tax debts are not included such as taxpayers with IRS approved installment agreements or Offers in Compromise. The IRS will also not certify to the State Department anyone who is in bankruptcy, a victim of identity theft or has a pending OIC or installment agreement.
Certification of ‘Seriously Delinquent Tax Debt’ Does Not Violate Due Process Nor Human Rights (Robert Rowen v. Comm. 156 TC No. 8, Mar. 30, 2021)
Dr. Rowen is a US citizen and a medical doctor licensed to practice in California. He travels to Singapore and China for family reasons and also to developing countries to provide free medical care. For two decades Dr. Rowen failed to file Federal income tax returns and accumulated a tax debt of $474,847. After failure to collect on this debt through notices, liens and levies, the IRS sent Dr. Rowen a Notice CP508C, ‘Notice of Certification of Your Seriously Delinquent Federal Tax Debt to the State Department’ as require by §7345.
Dr. Rowen argued §7345 is unconstitutional because it violates the Fifth Amendment’s Due Process Clause and that it violates his right to travel under the Universal Declaration of Human Rights (UDHR).
The Court responded that §7345 only provides for the certification of certain tax-related facts and does not restrict in any manner the right to international travel cannot run afoul of the Due Process Clause of the Fifth Amendment. Likewise, since §7345 does not restrict travel, the UDHR cannot provide any grounds for invalidating the Commissioner's certification. The court ruled there was no error in the certification by the IRS of the seriously delinquent tax debt.