5.19.25. Passport Program

(1) 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.

(2) Audience: These procedures and guidance apply to SB/SE Field Collection (FC) revenue officers, group managers, field compliance managers (FCM)/territory managers (TM), area directors, and SB/SE and TS employees responsible for processing balance due responses in the following functions:

• Automated Collection System (ACS) and ACS Support (ACSS)

• Compliance Services Collection Operation (CSCO)

• Field Assistance (FA) Offices

• Accounts Management (AM)

(3) Policy Owner: Director, Collection Policy, SB/SE

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

(5) Primary Stakeholders:

• SB/SE Collection employees in FC, ACS, ACSS, and CSCO functions

• AM employees

• FA employees

(6) 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.

(1) 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.

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

(3) 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.

(4) 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.

(1) 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:

1. A levy has been made pursuant to IRC 6331 or

2. A Notice of Federal Tax Lien (NFTL) has been filed pursuant to IRC 6323 and all administrative remedies under IRC 6320 have lapsed or been exhausted.

   Note: When a Collection Due Process (CDP) Lien hearing is timely requested, or pending, in connection with the filing of an NFTL, the taxpayer’s remedies under IRC 6320 have not been exhausted until the CDP hearing (and any appeals of the determination) have been concluded. If no CDP Lien hearing is requested for the NFTL, the above criteria is met once the time period for requesting a timely CDP hearing has lapsed.

   Note: A pending or requested Equivalent Hearing (EH) in connection with the filing of an NFTL, as described in IRM 5.1.9.3.2.2, Equivalent Hearing (EH) and Timeliness of EH Requests, and in IRM 5.19.8.4.3, Equivalent Hearing (EH) Requests and Timeliness of EH Requests, will not preclude a liability from being considered a seriously delinquent tax debt.

(2) 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.

(3) 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:

• ACA assessments, Individual Shared Responsibility Payments (SRP) modules (MFT 35 or 65)

• Employer Shared Responsibility Payments (ESRP) modules (MFT 43)

• Criminal Restitution assessments (MFT 31 with unreversed TC 971 AC 102)

• Child Support Obligations (NMF MFT 59)

• Report of Foreign Bank and Financial Accounts (FBAR) assessments

  Note: FBAR penalties are asserted under Title 31 as a non-tax debt and do not appear on IDRS. They are tracked on a separate database in Detroit where payments are posted and notices generated.

(1) 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:

1. Debt that is being paid in a timely manner as part of an installment agreement (IA) (unreversed transaction code TC 971 AC 063)

   Exception: Although some short term payment plans (TC 971 AC 899) and continuous wage levies (TC 971 AC 898) are monitored in status 60 on IDRS, they are not IAs and do not meet the criteria for this exclusion.

2. Debt that is being paid in a timely manner as part of an offer in compromise (OIC) accepted by the IRS (unreversed TC 780)

3. Debt that is being paid in a timely manner as part of a settlement agreement entered into with the Department of Justice

4. Debt in connection with a levy for which collection is suspended for a timely requested or pending CDP Hearing under IRC 6330 (unreversed TC 520 Closing Code 76/77 or TC 971 AC 275)

   Exception: An EH (unreversed TC 971 AC 278) in connection with a levy to collect the debt does not meet the criteria for this exclusion, as described in IRM 5.1.9.3.2.2, Equivalent Hearing (EH) and Timeliness of EH Requests, and in IRM 5.19.8.4.3, Equivalent Hearing (EH) Requests and Timeliness of EH Requests.

5. Debt on which collection has been suspended due to a claim for innocent spouse relief under IRC 6015 (unreversed TC 971 AC 065)

(2) 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.

(1) 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:

1. Debt that IRS determined is currently not collectible (CNC) due to hardship (unreversed TC 530 Closing Code 24-32)

2. Debt that IRS determined resulted from identity theft (unreversed TC 971 AC 522, 523, and 525)

3. Debt of a taxpayer in bankruptcy (unreversed TC 520 Closing Code 60-67, 81-89 (excluding Closing Code 82)

4. Debt of a deceased taxpayer (TC 540 and/or TC 530 Closing Code 08 present, along with date of death (DOD) displayed on command code CC INOLES)

   Note: On a joint account, only the deceased individual is excluded from certification.

5. Debt that is included in a pending OIC (unreversed TC 480)

6. Debt that is included in a pending IA (unreversed TC 971 AC 043)

7. Debt with a pending adjustment that will full pay the tax period (unreversed TC 470 Closing Code 90)

8. Taxpayers in a disaster zone (-O freeze, unreversed TC 971 AC 87)

Note: The TC 971 AC 87 will be on CC ENMOD, IMFOLE, or BMFOLE

Note: New certifications will be suspended for taxpayers in a disaster zone indicated with a -S freeze. However, previously certified taxpayer accounts will not be decertified by the -S freeze.

(2) 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.

(1) 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.

(2) 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.

(3) 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.

(4) 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:

1. Jeopardy levy

2. Disqualified employment tax levy (DETL)

3. Federal contractor (FEDCON) levy

4. Levy on a state (State Income Tax Levy Program (SITLP) to collect a federal tax liability from a state tax refund

   Note: For purposes of passport certification, a state income tax refund levy will not be recognized as a levy until CDP notification is provided.

(1) 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.

(2) 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.

(3) 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.

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

(5) 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.

(6) 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.

(7) 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.

(1) 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.

(2) The IRS Commissioner approval is required for certification and may only be re-delegated to the Division Commissioner of an operating division or to the Chief Tax Compliance Officer.

(3) 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.

(4) 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.

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

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

(2) 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.

(3) 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.

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

1. Is fully satisfied (status 12) or

2. Becomes legally unenforceable or

3. Ceases to be seriously delinquent tax debt

   Note: A previously certified debt ceases to be seriously delinquent tax debt when a statutory or discretionary exclusion is met. See IRM 5.19.25.4, Statutory Exclusions from Certification, or IRM 5.19.25.5, Discretionary Exclusions from Certification.

   Exception: Certifications will not be reversed because the taxpayer pays the debt to below the threshold amount indexed for inflation effective at the time of certification. All certified modules must be fully satisfied (e.g., status 12), become unenforceable, or meet an exclusion from certification to be reversed.

(2) 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:

1. A taxpayer is in a combat zone, but the IRS did not receive notification. The account was erroneously certified because no -C freeze was present.

2. The taxpayer has an approved IA being paid in a timely manner but the TC 971 AC 063 was not input in IDRS on the taxpayer account.

3. The taxpayer has an innocent spouse relief claim under IRC 6015, and the account was not properly coded.

4. The taxpayer has a timely filed CDP appeal but the TC 971 AC 275 or TC 520 Closing Code 76/77 was not input on the taxpayer account.

(3) 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.

(4) 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:

1. A certified taxpayer who later files bankruptcy

2. A certified taxpayer entering a combat zone

3. A certified taxpayer who is later determined to be CNC due to hardship (TC 530 Closing Code 24-32)

4. The DOS requests the IRS to decertify

5. An adjustment to the account that reduces the original certification amount below the threshold. The original return has been filed and processed or the adjustment has posted.

   Example: In 2022, IRS assesses taxpayer’s liability of $63,000, of which $9,000 is attributable to a penalty. The taxpayer’s seriously delinquent tax debt is certified. The taxpayer requests penalty abatement on the basis that they had a reasonable cause. IRS finds they had reasonable cause and abates the penalty, lowering the taxpayer’s total liability to $54,000. Since the liability is reduced below the 2022 threshold of $55,000, the taxpayer is eligible for decertification.

   Example: IRS audits a taxpayer and assesses a liability for Form 1040 for 2019 in the amount of $33,000 and Form 1040 for 2020 in the amount of $30,000. The taxpayer is certified based on the aggregate amount of $63,000. The taxpayer requests an audit reconsideration which results in the reduction of the assessment for 2019 from $33,000 to $10,000, and a reduction for 2020 from $30,000 to $15,000. The aggregate assessment was reduced from $63,000 to $25,000. Since there are no other certified modules and the adjustment reduced the aggregate balance below the threshold, certification can be reversed.

   Example: The taxpayer has a liability of $66,000 for Form 1040 for 2019 due to an SFR assessment. The taxpayer’s seriously delinquent tax debt is certified and a CP 508C is issued. The taxpayer is in the process of renewing their U.S. Passport with the DOS. The taxpayer files an original Form 1040 tax return for 2019 which reduces the tax debt to $30,000. Once the taxpayer’s return for 2019 is processed and posted on IDRS, the taxpayer will be eligible for decertification.

6. If a taxpayer claims they paid their certified debt on a module, and the module has an additional assessment, request assistance by encrypted email to *SBSE Passport Group with the subject heading Review of Subsequent Certified Module.

(5) 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.

(6) 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.

1. As modules are decertified, a TC 972 AC 641 will be shown on CC IMFOLT or TXMODA.

2. Once the last certified module for which a notice of such certification has been sent is reversed with a TC 972 AC 641, the taxpayer is considered decertified. A TC 972 AC 641 will display “FINAL” in the miscellaneous TXMODA field on the last certified module. A decertification notice (reversal of certification), CP 508R, is sent to each decertified individual separately. A TC 972 AC 641 will also generally be shown on CC ENMOD and CC IMFOLE, identifying the decertified individual by their SSN and the date of their decertification notice. The CP 508R will be shown in the notice history section of CC TXMODA.

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

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

(9) 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 heading Review of Certification.

(1) 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.

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

(1) 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.

(2) Passport certification questions may be received in the following ways:

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

(4) Advise taxpayers they can go to IRS.gov passport page for additional information.

(1) 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.

(2) 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.

(3) 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.

(4) 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.

(5) 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:

• Taxpayer’s name

• Taxpayer’s tax identification number (TIN)

• Docket number