The Law Q&A | Passport denial is latest weapon in IRS arsenal

The Law Q&A | Passport denial is latest weapon in IRS arsenal

The IRS has devised a clever new scheme of extorting money from taxpayers who owe.

IRS code regulation 7345 allows the IRS to ask the State Department to deny passport applications or renewals for taxpayers who owe the IRS more than $51,000 in past due taxes. The IRS began using this tool in February this year.

To do this, the IRS must certify to the State Department that your tax debt exceeds $51,000, including penalties and interest, for which a federal tax lien has been filed, a levy issued, and all administrative remedies under section 6320 have lapsed or been exhausted. Upon receipt of such certification, the State Department will deny any passport application or renewal.

Exceptions are tax debts where an IRS installment payment agreement has been entered into; a settlement agreement has been reached; a hearing regarding challenging the levy is scheduled; or collection is suspended for an innocent spouse (a spouse who claims having no knowledge of, or contribution to, the tax in question).

Additionally, a taxpayer won't be at risk when there is a pending bankruptcy by the taxpayer; the taxpayer is a victim of tax-related identity theft; the IRS has determined the taxpayer is not collectible due to hardship or lives is in a federally declared disaster area; or the taxpayer has pending a request for a proposed installment agreement or settlement.

The IRS must notify the taxpayer in writing at the time it certifies such tax debt to the State Department, and at the time it reverses such certification. Notice is by first-class mail to the last known address of the taxpayer.

As always, the king can do no wrong. The State Department cannot be sued for a passport denial/revocation arising out of any erroneous notification or erroneously failed decertification of such a tax debt.

However, you can sue the IRS in tax court of federal court to determine if the tax debt qualifies for passport denial.

The State Department will notify you in writing if your passport is denied or revoked because of this IRS debt certification. You can keep using the passport until you receive notice from State that it is so revoked. If you need it to keep your job, again, you must pay the tax or enter into a payment agreement with the IRS or fall into one of the other exceptions.

The State Department will hold your application open for 90 days to allow you to resolve any erroneous certification issues or to make payment to the IRS or enter into a satisfactory payment agreement.

If you are overseas when the passport is revoked, and you need it to get back to the homeland, State may issue you a limited-validity passport good only for direct return to the States.

The IRS will reverse your certification within 30 days of the date the tax debt is resolved, and it will give notice to the State Department as soon as practicable.

And no, you knuckleheads, you don't need a passport to go to any U.S. territory.

Or Alaska or Hawaii — which, by the way, are states.

But, ve haf vayz of making you pay.

May I zee yor pazzport, pleeez?

Brett Kepley is a lawyer with Land of Lincoln Legal Assistance Foundation. You can send your questions to The Law Q&A, 302 N. First St., Champaign, IL 61820. Questions may be edited for space.