Section 1 · IRC §7345 and FAST Act §32101
The 2015 legislation that linked tax debt to passport eligibility.
Section 32101 of the Fixing America's Surface Transportation Act of 2015 (Pub. L. 114-94), enacted December 4, 2015, added IRC §7345 to the Internal Revenue Code and amended 22 U.S.C. §211a authorizing the State Department to deny, revoke, or limit passports based on IRS certification of seriously delinquent tax debt. The legislation was originally proposed in 2012 as part of the MAP-21 highway bill and finally enacted as part of the FAST Act's surface transportation funding mechanisms.
The statutory framework operates as a coordinated two-agency mechanism: IRC §7345 governs the IRS's certification authority and procedural framework; 22 U.S.C. §2714a (as amended by FAST Act §32101) governs the State Department's responsive action. The two agencies operate independently — the IRS certifies, the State Department decides what to do with the certification. Per §7345(a), upon receiving an IRS certification, the Secretary of State "shall transmit such certification to the Secretary of State." The IRS and State Department coordinate through automated electronic transmission.
Technical amendments were enacted by the Consolidated Appropriations Act of 2018 (Pub. L. 115-141), refining definitions and procedural specifics. The IRS implementing guidance is set out at IRM 5.19.25 (Passport Program) — a dedicated IRM section addressing certification mechanics, exclusions, decertification procedures, and the IRS Passport Program's internal coordination with the State Department's Bureau of Consular Affairs. Practitioners should pull current IRM text; IRM 5.19.25 subsections are updated regularly to reflect operational changes.
Section 2 · IRS certification vs State Department action
Two agencies, two procedural domains, two different remedies.
The most procedurally important conceptual frame for §7345 practice is the two-step structure: IRS certification is one act; State Department passport action is a separate act. The taxpayer's remedies operate against the IRS certification under §7345 — not directly against the State Department's passport decision.
Step One — IRS Certification. Per §7345(a), the IRS Commissioner certifies that an individual has a seriously delinquent tax debt and transmits the certification to the State Department through the Secretary of the Treasury. The certification is the IRS's legal action and is the subject of §7345(e) judicial review. Decertification under §7345(c) operates against this certification — when the IRS decertifies, it transmits a reversal to the State Department.
Step Two — State Department Action. Per 22 U.S.C. §2714a, upon receiving an IRS certification, the State Department generally will not issue a new passport, may deny renewals, and may revoke a current passport. The State Department also retains authority to issue a limited-validity passport valid only for return to the United States for taxpayers overseas.
Critical procedural implication: when a client says "the IRS revoked my passport," the legally accurate statement is "the IRS certified the debt; the State Department revoked the passport." The practical remedies operate at the IRS level (decertification under §7345(c) or judicial review under §7345(e)) — but the operational passport status is restored by the State Department after notification of decertification. The IRS commits to notifying the State Department within 30 days of decertification — State Department processing then takes additional time.
Section 3 · §7345(b)(1) — the five-part test
Five elements. All required. If any fails, certification is procedurally defective.
Per IRC §7345(b)(1), "seriously delinquent tax debt" requires all of the following elements to be present simultaneously:
- 1. Assessed federal tax liability of an individual. The debt must be a tax assessment under the Internal Revenue Code against an individual taxpayer (not corporate). The assessment must be valid under standard IRC §6203 assessment procedures.
- 2. Legally enforceable. The debt must not have become unenforceable through CSED expiration under IRC §6502, bankruptcy discharge under 11 U.S.C. §523(a), or other unenforceability events. CSED-expired periods are excluded by operation of the legal-enforceability requirement.
- 3. Threshold exceeded. The unpaid balance (tax + penalties + interest) must exceed the inflation-adjusted threshold under §7345(b)(1) — $66,000 for 2026 per IRS Rev. Proc. 2025-32.
- 4. NFTL filed with §6320 rights exhausted, OR levy issued. Either (A) a Notice of Federal Tax Lien has been filed under IRC §6323 and the administrative appeal rights under IRC §6320 have lapsed or been exhausted, OR (B) a levy has been issued under IRC §6331.
- 5. No statutory or discretionary exclusion applies. Even where the four threshold elements are met, the §7345(b)(2) statutory exclusions or the IRM 5.19.25.5 discretionary exclusions may exempt the debt from certification.
Debt categories included (per IRM 5.19.25): U.S. individual income taxes, Trust Fund Recovery Penalties under IRC §6672, business taxes for which the individual is personally liable (Schedule C, single-member LLC), assessable civil penalties, and shared liability for joint income tax assessments.
Debt categories excluded: ACA Individual Shared Responsibility Payments (MFT 35/65); Employer Shared Responsibility Payments (MFT 43); Criminal Restitution assessments (MFT 31 with unreversed TC 971 AC 102); FBAR penalties under Title 31 (non-tax debt).
Section 4 · §7345(f) — the inflation indexing mechanism
The threshold adjusts every year.
IRC §7345(f) requires the seriously-delinquent threshold to be adjusted annually for inflation. The statutory base amount enacted in 2015 was $50,000.
| Year | Threshold |
|---|---|
| 2018 | $51,000 |
| 2019 | $52,000 |
| 2020 | $53,000 |
| 2021 | $54,000 |
| 2022 | $55,000 |
| 2023 | $59,000 |
| 2024 | $59,000 |
| 2025 | $62,000 |
| 2026 | $66,000 |
The 2026 threshold of $66,000 was announced in IRS Rev. Proc. 2025-32 (October 2025). Verify the current threshold before relying on any prior-year figure. Operational implication: partial payment that brings the balance below $66,000 does not trigger decertification — once certified, the taxpayer must pursue one of the affirmative §7345(c) decertification paths regardless of where the balance stands relative to the threshold.
Section 5 · The statutory carve-outs
Five statutory exclusions. Mandatory IRS decertification when applicable.
IRC §7345(b)(2) identifies categories of tax debt that are excluded from "seriously delinquent" status — even when the threshold and §6320/§6331 elements are otherwise met. The §7345(b)(2) exclusions are statutory, meaning the IRS is required to honor them. Once an excluded condition is established, the IRS must decertify under §7345(c).
A debt being paid in a timely manner pursuant to an agreement under IRC §6159 is statutorily excluded. The IA must be in effect — not merely pending. The taxpayer must be in compliance with the IA's payment terms. Default of the IA terminates the exclusion.
A debt being paid in a timely manner pursuant to an OIC under IRC §7122 that has been accepted by the IRS is statutorily excluded. OIC pendency alone is not sufficient — the offer must be accepted. Practitioners should not rely on OIC pendency for passport relief absent specific IRS guidance to the contrary.
A debt with respect to which collection is suspended due to a timely request for a CDP hearing under IRC §6330 is statutorily excluded. The exclusion attaches when Form 12153 is filed within 30 days of the LT11 / Letter 1058 for any tax period contributing to the certified debt. Only the tax periods covered by the timely CDP filing are excluded.
A debt where the taxpayer has made an election under IRC §6015(b), §6015(c), or has requested relief under §6015(f) is statutorily excluded. §7345(c)(2) specifically requires IRS notification within 30 days of the §6015 election or request — a faster decertification window than the general §7345(c) framework.
A debt that is the subject of a settlement agreement with the Department of Justice is statutorily excluded. This exception is rare in standard collection practice but applies in cases involving tax refund litigation, summons enforcement litigation, or other DOJ-tax-division matters.
Section 6 · Administrative discretionary exclusions
Four IRM-recognized discretionary categories.
Beyond the statutory exclusions, the IRS has identified additional discretionary exclusion categories in IRM 5.19.25.5. These are administrative — the IRS retains discretion to apply or not apply them — but in practice they function as reliable decertification grounds when properly documented.
Accounts placed in CNC status under IRM 5.16.1 due to economic hardship are discretionarily excluded. The taxpayer must demonstrate through Form 433-A that income does not exceed Allowable Living Expense standards. Coded with TC 530.
Taxpayers serving in a designated combat zone or participating in a contingency operation receive certification postponement under IRC §7508. The exclusion mirrors the IRS's broader combat-zone treatment.
Taxpayers who have established that the underlying liability arose from identity theft, with appropriate documentation (Form 14039, identity-theft case file), are discretionarily excluded pending resolution of the identity-theft case.
Where the IRS has an open adjustment in process that, when complete, will fully satisfy the tax debt (e.g., audit reconsideration in favor of the taxpayer, abatement processing, refund offset), the certification is discretionarily excluded pending the adjustment.
Section 7 · §7345(c) and CP508R
The reversal mechanism.
IRC §7345(c) governs decertification — the procedural reversal of certification. The statute requires the IRS Commissioner to notify the Secretary of the Treasury (and through the Secretary, the State Department) of decertification under specified conditions and timeframes.
General 30-day rule under §7345(c)(1): when the certification is found to be erroneous or the debt ceases to be seriously delinquent under §7345(b)(2), the IRS must notify within the period corresponding to IRC §6325(a) lien release — effectively a 30-day notification requirement after the qualifying event.
§6015 fast-track under §7345(c)(2): when the taxpayer makes an election or request under §6015(b), (c), or (f) (innocent spouse), notification must be made within 30 days of the election or request — independent of the general §7345(c)(1) timeframe. This is a faster-than-general decertification path.
The IRS communicates decertification by issuing CP508R (Reversal of Certification of Your Seriously Delinquent Federal Tax Debt) to the taxpayer by mail, with simultaneous electronic notification to the State Department. The State Department typically updates its records within 1-2 weeks of receiving the IRS reversal notification.
Section 8 · The travel-imminent procedural path
Expedited handling for taxpayers with imminent international travel.
The standard 30-day decertification window — plus State Department processing — is often too slow for taxpayers with imminent international travel. Per IRS Passport Program guidance, expedited decertification is available when specific conditions are met:
- 1. The taxpayer has proof of imminent international travel within the next 45 days
- 2. The taxpayer has an open or pending passport application at the State Department (issued denial letter for a pending application, or a pending application not yet acted on)
- 3. The underlying tax debt has been resolved through one of the §7345(c) decertification paths — typically IA approval, OIC acceptance, full payment, or CNC determination
- 4. The taxpayer or representative contacts the IRS Passport Program directly with documentation
- 5. Documentation includes: State Department denial letter, evidence of foreign travel within 45 days (booked tickets, business meeting invitations, family emergency documentation), confirmation of the underlying resolution (IA confirmation letter, OIC acceptance letter, CNC TC 530 posting, payment confirmation)
Critical practitioner note: per IRS.gov guidance, expedited decertification requires an open passport application. If the taxpayer's existing passport has been revoked and no new application is pending, the practitioner should first arrange for the new application (which triggers the State Department's 90-day hold) and then submit the expedited decertification request. This sequencing is essential — submitting expedited decertification with no open application produces no procedural benefit.
Section 9 · The IRS revocation referral authority
When the IRS asks State to revoke specifically.
Beyond certification, the IRS has authority to request that the State Department exercise its revocation authority — separate from the general FAST Act certification framework. Per IRS guidance, the IRS may recommend revocation in two scenarios: (1) where the IRS had previously reversed a taxpayer's certification because the taxpayer promised to pay but failed to do so (e.g., IA default after decertification); (2) where the taxpayer has offshore activities or interests that could be used to resolve seriously delinquent debt but the taxpayer does not utilize such resources.
Before sending a revocation referral to the State Department, the IRS sends Letter 6152 (Notice of Intent to Request U.S. Department of State Revoke Your Passport) to the taxpayer. Letter 6152 provides 30 days for the taxpayer to call the IRS and resolve the account. If the taxpayer fails to respond, the IRS may issue the revocation referral. Letter 6152 is a critical procedural notice — practitioners receiving it must coordinate immediate IRS contact and resolution proposal, typically through reinstatement of a previously-defaulted IA or other resolution path.
Section 10 · §7345(e) — judicial review
Garcia v. Commissioner and the de novo framework.
IRC §7345(e) provides judicial review of IRS passport certifications. The taxpayer may file a civil action either: (a) in the U.S. Tax Court, or (b) in U.S. District Court. Tax Court is the more common forum given its expertise in tax matters. The petition is filed at the United States Tax Court in Washington, D.C., either by mail or electronically through DAWSON.
Standard of review — the Garcia framework: In Garcia v. Commissioner, 164 T.C. No. 8 (May 19, 2025), the Tax Court held in a reviewed opinion that passport certification challenges under IRC §7345 are reviewed de novo. The court "will accept new evidence as to the debt's enforceability," meaning the Tax Court is not limited to the administrative record before the IRS. This is analogous to but more permissive than the Sego v. Commissioner, 114 T.C. 604 (2000), framework for CDP de novo review on underlying liability.
- • The threshold under §7345(b)(1) was not actually exceeded as of the certification date
- • The §6320 administrative rights were not actually exhausted (e.g., a timely CDP request was pending at certification)
- • A §7345(b)(2) statutory exclusion was in effect but not honored
- • A discretionary exclusion under IRM 5.19.25.5 should have applied but was not applied
- • The underlying assessment is not legally enforceable (CSED expiration, procedural defects)
- • The debt does not qualify categorically (FBAR penalties, ESRP/SRP improperly included)
Remedy: where the Tax Court finds the certification erroneous, the court orders decertification. The court does not order release of the underlying tax debt — the debt remains owed; only the certification is reversed. The taxpayer must still resolve the underlying tax debt through one of the §7345(c) decertification paths for permanent passport restoration unless the court's finding goes to the substance of the debt itself.
Section 11 · §7345 case law beyond Garcia
What the courts have actually held.
The §7345 case law remains relatively young — the statute is only 10 years old and judicial review under §7345(e) was added by the original 2015 enactment. Beyond Garcia, several recent decisions have refined the framework:
The Tax Court sustained the IRS's certification of a $1.6 million seriously delinquent tax debt consisting of unpaid Trust Fund Recovery Penalties under IRC §6672. The court held that TFRP assessments fully count toward the §7345(b)(1) threshold, that the §6320 administrative rights had been properly exhausted, and that the petitioner had failed to substantiate any §7345(b)(2) exclusion. Spencer is the leading recent decision confirming that TFRP-based certifications meet the statutory framework.
The Tax Court granted summary judgment to the IRS in a passport revocation case where the petitioner claimed his brother had accepted responsibility for the underlying business taxes in a civil embezzlement suit. The court held that the petitioner could not challenge the underlying liability through §7345 review and that the certification was not erroneous despite the related civil litigation. Shaban confirms that §7345(e) review focuses on the certification's procedural correctness — not on the merits of the underlying tax liability.
The Second Circuit affirmed Tax Court dismissal of a §7345 challenge as moot when the IRS reversed its certification, and held that the court should also have dismissed the related underlying-liability challenge as moot. The Second Circuit decision confirms that §7345 jurisdiction is narrowly limited to the certification itself and does not provide a vehicle for separate underlying-liability litigation.
In 2025, the IRS withdrew proposed regulations (REG-129260-16) that would have authorized the State Department to disclose returns and return information to its contractors regarding passport revocation cases. The withdrawal eliminates a potentially controversial information-disclosure mechanism in proposed form since 2017, but does not affect the §7345 statutory framework.
Section 12 · Practitioner pitfalls
Eight common errors.
- 1. Not pulling the account transcript at engagement. Per IRM 5.19.25, the IRS does NOT send CP508C to the power of attorney. Practitioners must pull account transcripts and check for TC 971 AC 626 (certification posting) and TC 972 AC 626 (reversal posting). Asking the client whether they've been certified is unreliable — many clients do not receive or do not understand CP508C.
- 2. Confusing IRS certification with State Department action. The IRS certifies; the State Department revokes. §7345(e) review operates against the IRS certification, not the State Department's action. APA-style District Court actions against the State Department are procedurally separate and typically less effective.
- 3. Relying on OIC pendency for passport relief. §7345(b)(2)(B)(ii) requires OIC acceptance, not just pendency. Practitioners should not assume pending OICs trigger decertification. Confirm acceptance through OIC acceptance letter or TC posting before claiming passport relief.
- 4. Missing the §7345(c)(2) fast-track for innocent spouse. Pending §6015 requests trigger 30-day decertification under §7345(c)(2) — independent of the general §7345(c)(1) timeframe. Practitioners with innocent spouse cases should specifically invoke §7345(c)(2) in decertification requests.
- 5. Requesting expedited decertification without an open passport application. Per IRS guidance, expedited handling requires an open application at the State Department. If the existing passport has been revoked with no new application pending, file the application first to trigger State Department processing, then request expedited decertification.
- 6. Failing to address all certified periods. A timely CDP filing under §7345(b)(2)(B)(iii) covers only the periods named in the CDP request. Practitioners should review all certified periods and pursue resolution for each — not assume that one CDP-protected period decertifies the entire account.
- 7. Not coordinating with the State Department for time-sensitive cases. IRS decertification triggers a 30-day IRS notification window, but State Department processing then takes additional time. For taxpayers with imminent travel, practitioners should coordinate directly with the State Department's Passport Services Office in addition to IRS-side decertification.
- 8. Treating threshold-crossing as decertification. Partial payment that brings the balance below $66,000 does not trigger decertification — IRS guidance is explicit on this point. Practitioners should plan resolution around §7345(b)(2) and §7345(c) decertification paths, not threshold avoidance.
Section 13 · FAQ (6 practitioner questions)
Practitioner-grade questions.
How does the §7345 framework interact with the §6502 CSED?
Where the CSED has expired for a certified tax period, the debt becomes legally unenforceable under IRC §6502, failing the §7345(b)(1) legal-enforceability element. Practitioners should pull account transcripts and run CSED calculations for each certified period — including any tolling events under IRC §6503 (CDP pendency, OIC pendency, bankruptcy stay, military service tolling, six-month absence tolling, TAS pendency). If any certified period has CSED-expired, the certification as to that period is procedurally defective and grounds for §7345(e) challenge. Where partial CSED expiration leaves the remaining balance below the $66,000 threshold, the entire certification becomes defective.
Can FBAR penalties trigger §7345 certification?
No. FBAR penalties asserted under 31 U.S.C. §5321 are Title 31 non-tax debts, not IRC tax liabilities. Per IRM 5.19.25, FBAR penalties are tracked on a separate database in Detroit and do not appear on IDRS — and they do not count toward the §7345(b)(1) threshold or trigger §7345 certification. Taxpayers with substantial FBAR liabilities and modest IRC tax liabilities below $66,000 are typically not subject to §7345 certification.
What is the procedural treatment of joint-return liabilities under §7345?
§7345 operates against the individual taxpayer certified — typically the joint filer in a joint-return situation. Both joint filers may be certified if both meet the §7345(b)(1) elements. Innocent spouse relief under IRC §6015 (raised by the non-liable spouse) triggers §7345(b)(2)(B)(iv) statutory exclusion and the §7345(c)(2) 30-day fast-track decertification. Practitioners should evaluate §6015(b) (general innocent spouse), §6015(c) (separate liability election for divorced/separated taxpayers), and §6015(f) (equitable relief) for the strongest applicable ground.
Does §7345 apply to non-citizens with U.S. tax debt?
§7345 applies to U.S. passports — meaning the certification framework operates against U.S. citizens and U.S. nationals who hold or apply for U.S. passports. Non-resident alien taxpayers with U.S. tax debt are not subject to U.S. passport revocation under §7345. However, U.S. citizens residing abroad (including dual citizens, expatriates with continuing tax obligations under IRC §877A or otherwise, and accidental Americans) are subject to §7345 certification — making §7345 a significant concern for the FATCA-era expatriate population.
What is the interaction between §7345 certification and bankruptcy?
A bankruptcy filing triggers the automatic stay under 11 U.S.C. §362, which generally prohibits the IRS from continuing collection activity — including the issuance of new certifications. Existing certifications are not automatically vacated by bankruptcy filing. Post-discharge, if the bankruptcy discharges the underlying tax debt under 11 U.S.C. §523(a)(1), the discharged tax is no longer legally enforceable — failing the §7345(b)(1) enforceability element and grounds for §7345(e) challenge. Tax debt that survives bankruptcy discharge remains certified if the threshold and other elements are met.
Can §7345 certification be challenged in U.S. District Court rather than Tax Court?
Yes — IRC §7345(e) explicitly authorizes the §7345(e) civil action in either the U.S. Tax Court or the U.S. District Court. Tax Court is the more common forum given the Garcia de novo framework specifically articulated in Tax Court precedent. District Court actions are typically pursued where there is parallel non-§7345 litigation already in District Court or where particular procedural advantages favor District Court. Note that the recent United States v. Hatch District Court decision found the District Court lacked authority to compel decertification — practitioners should evaluate forum strategy carefully.
Section 14 · Citation Index
Bluebook citation index.
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