What Is Seriously Delinquent Tax Debt?

The term “seriously delinquent tax debt” is a specific legal classification from the Internal Revenue Service for certain unpaid taxes. This designation is defined under federal law and triggers consequences managed by both the IRS and the U.S. Department of State. The status moves a taxpayer’s case beyond standard collection notices and is reserved for debts meeting criteria established by Congress.

Criteria for Seriously Delinquent Tax Debt

For a tax liability to be categorized as seriously delinquent, it must satisfy a precise, three-part test. The first element is the total amount owed. The debt must exceed a specific threshold, which includes the assessed tax, penalties, and interest combined. For 2025, this amount is over $64,000, a figure that is adjusted annually to account for inflation.

The second condition is that the tax must be formally “assessed.” An assessed liability is one that the IRS has officially recorded on its books. This typically happens after a tax return is filed, or after the IRS determines a tax is owed through an audit or other examination and the taxpayer has exhausted their initial appeal rights.

The final criterion involves a specific collection action already being taken by the IRS. To meet this requirement, the IRS must have either filed a Notice of Federal Tax Lien and the taxpayer’s subsequent rights to a hearing have expired or been exhausted, or the agency must have issued a formal levy to seize property or assets.

The Passport Certification Process

Once the IRS identifies a tax debt as seriously delinquent, it initiates a formal certification process that directly impacts a taxpayer’s ability to travel internationally. The agency’s primary action is to transmit a certification of the debt to the U.S. Department of State. This notification is mandated by the Fixing America’s Surface Transportation (FAST) Act, which gives the government authority to restrict passport services for individuals with these specific tax debts.

In conjunction with notifying the State Department, the IRS is required to inform the taxpayer. This is accomplished by mailing a specific document, Notice CP508C, “Notice of Certification of Your Seriously Delinquent Federal Tax Debt to the State Department.” This notice explains that the certification has occurred and outlines the potential consequences for the taxpayer’s passport.

Upon receiving the certification from the IRS, the State Department is responsible for taking action on the passport itself. The State Department will generally deny any new or renewal passport application from a certified individual. Furthermore, the department has the authority to revoke an existing passport, although this is discretionary. The State Department, not the IRS, controls the passport, but its actions are directly triggered by the IRS’s certification.

Pathways to Resolution and Decertification

The most direct method is paying the tax debt in full. Once the liability is fully satisfied, the IRS is required to reverse the certification, typically within 30 days, and notify the State Department that the taxpayer is no longer subject to passport restrictions.

Entering into a formal, approved Installment Agreement with the IRS is another effective solution. Simply applying for a payment plan is not sufficient; the agreement must be officially accepted by the IRS. Once the taxpayer is in compliance with a timely payment plan, the debt is no longer considered seriously delinquent, and the IRS will issue a decertification.

An Offer in Compromise (OIC) that has been accepted by the IRS also removes the seriously delinquent status. Similar to an installment agreement, the mere submission of an OIC application does not stop the process; the offer must be formally accepted by the agency to trigger the decertification.

Certain administrative or legal resolutions will also lead to a reversal. If a taxpayer successfully obtains Innocent Spouse Relief, where the IRS determines they are not responsible for taxes owed by their spouse or former spouse, the associated debt is removed from their name and the certification is reversed. Likewise, if the IRS places the account in Currently Not Collectible (CNC) status due to financial hardship, the debt is no longer subject to the passport provisions.

Making a timely request for a Collection Due Process (CDP) hearing in response to a lien or levy notice also prevents a debt from being certified as seriously delinquent. Finally, resolving the tax debt as part of a bankruptcy proceeding will also lead the IRS to reverse the certification.