In the recent case of Adams v. Commissioner, the U.S. Tax Court held that it lacks jurisdiction to review the constitutionality of passport-related actions taken by the U.S. Secretary of State in response to the taxpayer’s seriously delinquent tax debt.
In 2023, a seriously delinquent tax debt is an unpaid federal tax assessment exceeding $59,000, where a lien has been filed and other remedies have been exhausted. If such conditions exist, the U.S. Department of State can deny, revoke or limit a passport.
The aforementioned case involves a taxpayer with more than $1.2 million in unpaid, legally enforceable federal income tax liabilities. After unsuccessfully trying to collect the debt, the IRS certified to the Secretary of State that the taxpayer indeed had a “seriously delinquent tax debt” within the meaning of Internal Revenue Code Section 7345(b).
In response, the taxpayer filed a petition with the Tax Court under Sec. 7345(e)(1) to challenge the certification. He argued that:
- The certification was erroneous because the IRS hadn’t shown that the tax liabilities had been properly assessed, and
- Declining to renew his passport because of unpaid taxes was an unconstitutional denial of his right to international travel.
The Tax Court held that, to the extent the taxpayer had raised a substantive challenge to the liabilities underlying Sec. 7345 certification, it lacked jurisdiction to review the liabilities underlying said certification.
It further held that, to the extent the taxpayer raised a definitional challenge based on the text of Sec. 7345(b)(1)(A), his statutory argument failed. According to the court, the tax regulation in question requires that the unpaid, legally enforceable tax liability underlying a seriously delinquent tax debt “has been assessed,” not that it “has been properly assessed” (emphasis added). In addition, the court held that there was no dispute that the underlying liabilities had been assessed, and it lacked jurisdiction to review the constitutionality of passport-related actions taken by the Secretary of State.
For more information about seriously delinquent tax debts and passport revocation, contact Sol Schwartz & Associates and your attorney.
Adams v. Commissioner, No. 1527-12P, January 23, 2023 (U.S. Tax Court)
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