TaxSOS.com Tax Problems Blog

January 29, 2018

IRS infringing on Taxpayer Due Process Rights. The Taxpayer Advocate has issued a Taxpayer Assistance Order concerning the passport certification program.

On Jan. 22, 2018, the IRS began implementation of the passport certification program. Under this program (IRC § 7345) the IRS is authorized to certify a taxpayer’s seriously delinquent tax debt to the Department of State for the purposes of passport denial, limitation, or revocation. A seriously delinquent tax debt is an assessed, individual tax liability exceeding $51,000 for which either a notice of federal tax lien has been filed and the administrative rights under section 6320 with respect to such filing have been exhausted or have lapsed, or a levy has been made. Exceptions include: current installment agreements (IAs), offers in compromise (OICs), and Collection Due Process (CDP) hearings.

The Taxpayer Advocate has advised that the IRS planned procedures for implementing this program is a Most Serious Problem in its Annual Report to Congress.

The Most Serious Problem includes the lack of prior notice to taxpayers and the potential for this lack of notice to infringe on U.S. Constitutional due process protections. Research estimates that over three-quarters of the individual taxpayers potentially eligible to be certified will not have received any notice at all prior to certification because they received their CDP notices prior to the IRS including passport information in these notices.

One of the major issues which the Taxpayer Advocate has focused upon is the REFUSAL OF THE IRS to exclude from the passport certification program taxpayers with already open Taxpayer Advocate cases. Moreover, the IRS has ignored the legislative history, which reflects Congress’s intent that taxpayers not be certified until their administrative rights have been exhausted or lapsed. In addition, the IRS also ignores its own guidelines. Further, the IRS has refused to exclude taxpayers who have come to the Taxpayer Advocate for help in trying to resolve their tax debts, either because they have economic difficulties or because IRS processes have failed the taxpayer.

Because the IRS has denied the repeated requests by the Taxpayer Advocate for the IRS to exclude already open Taxpayer Advocate cases from certification, the Taxpayer Advocate has taken action to protect these taxpayers.

On Jan. 16, 2018, the Taxpayer Advocate issued Taxpayer Assistance Orders (TAOs) for every one of almost 800 taxpayers, ordering the IRS not to certify their seriously delinquent tax debts to the Department of State. By operation of law, the IRS must refrain from certifying any of these taxpayers until these Taxpayer Advocate Orders are rescinded or modified.

The action was necessary due to the imminent, irreparable harm that taxpayers may face by the loss of their passports and the right to travel internationally, such constituting a clearly compelling public policy for assisting any taxpayer subject to passport certification.

Taxpayer Advocate posting at this link – HERE

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