Purpose: This IRM provides procedural guidance and instructions for working passport certification balance due cases in response to written, phone and face-to-face taxpayer contacts.

Audience: These procedures and guidance apply to SB/SE Field Collection (FC) revenue officers, group managers, territory managers and area directors, and SB/SE and W&I employees responsible for processing balance due responses in the following functions:

Policy Owner: Director, Collection Policy, SB/SE

Program Owner: Collection Policy, SB/SE, Insolvency (INS)

Primary Stakeholders:

Program Goals: This IRM provides fundamental knowledge and procedural guidance for employees who work passport certification related cases. By following the processes and procedures provided by this IRM, employees will correctly address and process passport certification cases and respond to taxpayers in accordance with IRS policy and procedures.

IRC 7345 requires the IRS to notify the DOS that an individual is certified as owing a seriously delinquent tax debt. Upon certification, the DOS is responsible for taking action to deny, revoke or limit a passport.

The IRS Commissioner has delegated the authority for certification or reversal of a certification to the IRS Commissioner, SB/SE.

When this notification of certification is received from the IRS, the DOS is generally required to deny the certified individual a U.S. passport (or renewal of a U.S. passport) or may revoke or limit any U.S. passport previously issued to that individual. The DOS has the sole authority for denying, revoking, or limiting a U.S. passport of a certified individual. The IRS may request the DOS consider revoking a U.S. passport of a certified individual; however, the decision to revoke a passport of a certified taxpayer lies solely with the DOS. The DOS may act on its own initiative to revoke a passport. The passport of any certified taxpayer may be revoked by the DOS without additional advance notice to the taxpayer or the IRS.

Passport certification is separate and distinct from obtaining passport information from the United State Passport Office in connection with an official investigation. See IRM 5.1.18.12.1, Requesting a Passport Check, for procedures on how to request a passport check.

For the purpose of passport certification, seriously delinquent tax debt is the unpaid, legally enforceable federal tax liability, which has been assessed, of an individual totaling more than $50,000 for which:

The $50,000 threshold, which is indexed yearly for inflation, is the aggregate unpaid balance of assessment. The unpaid balance of assessment includes tax and assessed interest and penalties. It does not include accrued interest and penalty.

Unless otherwise listed as statutory or discretionary exclusions in IRM 5.19.25.4, Statutory Exclusions from Certification, or IRM 5.19.25.5, Discretionary Exclusions from Certification, a seriously delinquent tax debt includes, but is not limited to, tax assessments made under an individual’s taxpayer identification number (SSN or EIN) such as U.S. individual income taxes, trust fund recovery penalties, business taxes for which the individual is liable and other civil penalties. This does not include other non-tax liabilities such as:

IRC 7345(b)(2) excludes the following tax debt from the determination of seriously delinquent tax debt, even if it meets the criteria in IRM 5.19.25.3, Seriously Delinquent Tax Debt:

Certification is postponed under IRC 7508(a)(3) for taxpayers serving in a combat zone (–C freeze caused by unreversed TC 500 Closing Code 52, 54 or 56). See IRM 5.19.10.6.4, Combat Zone Computation of Suspense Period. For taxpayers serving in a combat zone who owe a seriously delinquent tax debt, the IRS postpones notifying the DOS.

IRC 7345 provides the IRS discretion to exclude categories of tax debt from certification, even if the debt meets the criteria in IRM 5.19.25.3, Seriously Delinquent Tax Debt. The following categories of tax debt will be excluded from the determination of seriously delinquent tax debt of the IRS:

These discretionary exclusion categories are subject to change in the future. A discretionary exclusion does not mean IRS employees have discretion in applying exclusions. The IRS made a policy decision that discretionary exclusions apply to all taxpayers who meet the exclusion criteria.

As described in IRM 5.19.25.3, Seriously Delinquent Tax Debt, the issuance of a levy is one of the criteria for certifying a tax debt as seriously delinquent. TC 971 AC 640 has been created to identify tax periods for which levy action has occurred. As of January 1, 2017, this TC is systemically uploaded the first time a module is included on levy actions.

The systemic input of TC 971 AC 640 to identify levy action on the taxpayer’s account is delayed for eight weeks if the taxpayer is given post-levy CDP rights the first time the module is included on a levy. This will allow the taxpayer time to appeal.

Once levy action has occurred on a module, employees will generally not need to take any further steps for the levy action to be identified.

The following are examples from IRC 6330(f) and (h) in which the IRS may serve a levy to collect taxes prior to giving the taxpayer pre-levy CDP rights:

Seriously delinquent tax debt will be identified as certified by an unreversed TC 971 AC 641 (Passport - certified seriously delinquent tax debt) on each module of a taxpayer’s account eligible for certification. The TC 971 AC 641 will be added to CC ENMOD, TXMODA, IMFOLE, BMFOLE, IMFOLT, and BMFOLT identifying the certified individual by their SSN and the date of their certification notice.

Each individual identified as certified will be systemically sent a certification notice, CP 508C, Notice of Certification of Your Seriously Delinquent Federal Tax Debt, displaying each certified module balance. The notice will be sent to the individual’s last known address. The issuance of a CP 508C will be displayed in the notice history section of CC TXMODA. Except in the circumstances described in IRM 5.19.25.8.1, Taxpayer Notification of Subsequent Certified Modules, certified taxpayers should only receive one certification notice.

On a joint module where both the primary and secondary taxpayers are identified as certified, each individual will have their own TC 971 AC 641.

Taxpayer certifications will be provided systemically to the DOS on a weekly basis.

A certified module is reversed when it meets one of the conditions listed in IRM 5.19.25.10, Reversal of Certification. When the module is identified as meeting one of the conditions for reversal of certification, the TC 971 AC 641 will systemically reverse with a TC 972 AC 641.

Each taxpayer’s certification stands on its own. A taxpayer will be decertified when the last certified module is reversed with a TC 972 AC 641 FINAL in the miscellaneous TXMODA field on the last certified module. A decertified taxpayer will be sent a reversal of certification notice, CP 508R, Reversal of Notice of Certification of Your Seriously Delinquent Federal Tax Debt to the U.S. Department of State. On a joint account where both the primary and secondary taxpayers are identified as certified, each individual will have their own TC 972 AC 641 to reverse the certification.

The CP 508R will be shown in the notice history section of CC TXMODA. The TC 972 AC 641 indicating reversal of certification will be displayed on CC ENMOD, TXMODA, IMFOLE, BMFOLE, IMFOLT, and BMFOLT, and reflect the SSN of the decertified individual and date of the decertification (reversal of certification) notice. On a weekly basis, IRS will systemically inform the DOS regarding each newly decertified taxpayer.

The IRS is required to notify the taxpayer in writing at the time the certification of seriously delinquent tax debt is made to the DOS. CP 508C is sent to the taxpayer to notify them that they were certified.

The IRS Commissioner approval is required for certification and may only be re-delegated to the Commissioner of an operating division or to the Deputy Commissioner for Services and Enforcement.

The CP 508C may identify more than one TIN related to a specific taxpayer. Both the liabilities of the IMF and BMF accounts may be used to determine whether the taxpayer meets the certification threshold.

The IRS is also required to notify the taxpayer in writing at the time the certification is reversed. CP 508R, Reversal of Notice of Certification of Your Seriously Delinquent Federal Tax Debt to the U.S. Department of State, is sent to the taxpayer to notify them they were decertified.

The IRS will send these notices systemically by regular mail to the taxpayer’s last known address.

On a weekly basis, the IRS will inform the DOS of newly certified taxpayers.

The DOS will hold the application of a certified taxpayer open for 90 days to allow the taxpayer to resolve any erroneous certification issues, make full payment of the tax debt or enter into a satisfactory payment alternative with the IRS before denying the application.

The DOS is responsible for issuance of passports. The IRS does not have authority to issue or deny a passport. Under 22 U.S.C. 2714a, the DOS may, notwithstanding a certification from the IRS, issue a passport to a taxpayer if the DOS determines emergency circumstances or humanitarian reasons justify issuance of the passport. This does not affect the taxpayer’s certification as a seriously delinquent taxpayer or reverse their certification. If a taxpayer who is responding to a certification letter from the IRS or a denial letter from the DOS requests their passport be issued for non-tax-related reasons, refer them to their local passport office or to the contact information provided on their DOS correspondence.

The IRS will systemically notify the DOS within 30 days if the previously certified tax debt:

If the certification is found to be erroneous, the IRS will notify the DOS as soon as practicable. The IRS will also notify the taxpayer once the certification is reversed. Examples of erroneous certification are:

The tax court or district court of the United States orders the IRS to reverse the certification. See IRM 5.19.25.13, Appeals Process and Judicial Review of Certification.

The IRS has the discretion to decertify a taxpayer for other reasons. The IRS will decertify a previously certified tax debt that ceases to be seriously delinquent tax debt when a discretionary exclusion is met. See IRM 5.19.25.5, Discretionary Exclusions from Certification. Examples of discretionary reversal include:

Certification will not be reversed where a taxpayer requests a CDP hearing or innocent spouse relief for tax periods which are not the basis of the certification.

Certified modules that are later fully satisfied (e.g., status 12), become unenforceable, or meet exclusion criteria (e.g., approved IA), will have a TC 972 AC 641 input to reverse the previous TC 971 AC 641.

On a joint module, a separate TC 972 AC 641 will be input to decertify each spouse.

On a weekly basis, IRS will systemically inform the DOS of each newly decertified taxpayer.

If the taxpayer requests decertification, it meets decertification criteria, and you cannot determine why the modules were not decertified, request assistance by encrypted email to *SBSE Passport Group with the subject Review of Certification.

The decision to revoke a passport of a certified taxpayer lies solely with the DOS. They retain sole authority to issue, limit, or revoke a passport. The DOS may act on its own initiative to revoke a passport. The passport of any certified taxpayer may be revoked by the DOS without additional advance notice to the taxpayer or the IRS.

Once a passport is revoked, the taxpayer may only get another one by resolving the tax debt, reapplying and paying all applicable passport fees.

IRS sends taxpayers a CP 508C to notify them of the certification of a seriously delinquent tax debt. The notice includes an IRS phone number the taxpayers can call to resolve their tax issues (e.g. enter an IA, OIC, or full pay) and have the certification reversed.

Passport certification questions may be received in the following ways:

FA and Philadelphia ACS and ACSS employees: If you receive passport certification inquiries, answer general questions and resolve the case using normal procedures.

Advise taxpayers they can go to IRS.gov passport page (https://www.irs.gov/businesses/small-businesses-self-employed/revocation-or-denial-of-passport-in-case-of-certain-unpaid-taxes) for additional information.

There is no administrative appeal, claim process, or administrative hearing that can be filed with the IRS if the taxpayer believes that a certification is erroneous.

After the Commissioner notifies a taxpayer of certification, the taxpayer may bring a civil action against the United States in the tax court or a district court of the United States.

The taxpayer is not required to file an administrative claim or otherwise contact the IRS to resolve the erroneous certification issue before filing suit in the tax court or district court of the United States.

If the court determines the certification is erroneous or if the IRS failed to decertify the taxpayer when the certification should have been reversed, it can order the certification reversed.

Counsel will provide notification to the passport analyst in an e-mail to *SBSE Passport Group when decertification is required as a result of litigation. The e-mail should include: