IRS Indicates Intent to Actively Pursue Passport Revocations

Eli Noff, Esq., Partner

Mary F. Lundstedt, Esq., Associate

As we reported last year, the IRS is actively targeting taxpayers with "seriously delinquent tax debt" for passport denial/revocation.[1] Recently, on July 12, 2019, the IRS released interim guidance for agency officials regarding passport decertification and revocation.[2] The guidance signifies a significant shift in enforcement. Until now, some certified taxpayers have experienced the enforcement of passport denial (i.e., denial of passport renewal or denial of an initial passport application), but the interim guidance emphasizes the IRS's ability to request revocation. Additionally, the interim guidance indicates that the IRS will issue a new Letter 6152 which will warn taxpayers that their passports will be revoked. The guidance also clarifies existing guidance regarding expedited decertification requests.

New Letter 6152

Per Internal Revenue Code (IRC) §7345, upon IRS certification that an individual has "seriously delinquent tax debt," the U.S. Department of State has the sole authority to deny, revoke or limit that taxpayer's passport. According to the interim guidance, the IRS may, however, specifically request that the U.S. Department of State revoke a taxpayer's passport. Significantly, the interim guidance emphasizes that before such request may be made, the IRS must issue a new Letter 6152, Notice of Intent to Request U.S. Department of State Revoke Your Passport.

The guidance clarifies the circumstances which would prompt it to consider making a revocation request. First, a revocation request may be made if the IRS finds it necessary to protect the integrity of the legislation (e.g., a taxpayer promises to pay the liability in exchange for decertification, but subsequently fails to act as agreed). Next, the IRS states that it may request revocation "[i]f revocation is needed to encourage payment of the tax by incentivizing taxpayers with offshore activities or interests to resolve their liabilities."[3] Finally, the IRS provides something of a catchall, such that it can make the request in "other instances where the facts and circumstances indicate that revocation would facilitate payment of tax."[4]

The IRS notes that only Headquarters Collection may issue the Letter 6152. Additionally, the letter will not be issued during the 30-day period after the issuance of the final Notice CP508C, Notice of certification of your seriously delinquent federal tax debt to the State Department. The IRS states that supervisory approval of the revocation recommendation will be made in writing prior to the issuance of the Letter 6152.

Expedited Decertification

The IRS grants that a certified taxpayer may request expedited decertification if he or she is able to show an imminent need for a passport. Expedited decertification generally shortens the typical 30-day processing time by 14 to 21 days.

The interim guidance clarifies existing guidance pertaining to expedited requests. The guidance instructs agency officials to request expedited decertification when:

  1. eligibility under IRM 5.1.12.27.8 is established;
  2. the taxpayer states and proves that their trip is scheduled within 45 days or less and can provide proof of travel, or the taxpayer lives outside the U.S., and
  3. the taxpayer's application for a passport or renewal is pending and he or she provides a copy of the passport denial letter issued by the U.S. Department of State.[5]

The interim guidance specifies that "a flight itinerary, hotel reservation, cruise ticket, international car insurance, or other document showing location and date of travel or time-sensitive need for a passport" may be used to meet the requirement to provide proof of travel.

Conclusion

The recent interim guidance provides that: (1) the IRS may request revocation; (2) the IRS must warn a taxpayer of its intent to request passport revocation by first issuing a Letter 6152; and (3) a taxpayer, otherwise qualifying for expedited decertification, must be prepared to provide tangible proof of travel. The guidance's provisions regarding revocation are an indication that, henceforth, the IRS will be actively pursuing passport revocation. Taxpayers in receipt of a Letter 6152, or in need of expedited decertification, should consult a tax professional for assistance in finding a resolution with the IRS that preserves passport privileges.

If you are concerned about maintaining your passport privileges, call Frost & Associates, LLC today at 410-497-5947.


[1] https://www.districtofcolumbiataxattorney.com/Articles/IRS-Actively-Targeting-Taxpayers-For-Passport-Denial-Revocation.shtml.

[2] sbse-05-0719-0869 (July 12, 2019).

[3] Id. at 1.

[4] Id.

[5] Note that if a taxpayer's passport is revoked and he or she needs to request expedited decertification, the taxpayer must have applied for a new passport and received the denial notification.

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