Four Winning IRS Passport Revocation Strategies
In 2015, the federal government authorized the IRS to take the passports of taxpayers who have seriously delinquent tax debt. Under the Fixing America’s Surface Transportation Act (FAST Act), the government must deny a passport application and may revoke a current passport. Early intervention is usually the best way to stop such adverse actions. But for various reasons, such intervention in the IRS passport restriction process is not always possible. Fortunately, there are also some liberal provisions concerning judicial review.
Certification actions usually arise in Tax Court. So, judicial review usually takes place in the U.S. Court of Appeals for the D.C. Circuit. Largely because of that venue, these cases have some unique procedural aspects, as outlined below.
Motion to Dismiss, Lack of Jurisdiction
If the IRS cannot produce a CP508C certification within a reasonable time, the judge may dismiss the IRS passport revocation proceedings. As mentioned in a previous post, this certification must state that the taxpayer owes at least $51,000 (as of January 2018) and that no exception applies. Common exceptions include participation in an installment agreement and a request for innocent spouse relief.
A win on a motion to dismiss is usually not the same thing as a win on the merits. The government can usually just refile. However, a motion to dismiss does force the government to start over. Many times, U.S. attorneys would rather work out a favorable deal than go through all that hassle.
MTD, Failure to State a Claim
If the named defendant does not owe the money, a substantive motion to dismiss may be appropriate. For example, the taxpayer may be John Smith LLC and the defendant in the IRS passport revocation matter may be John Smith.
Technically, this motion to dismiss could be a resolution on the merits. But most judges give parties the chance to amend their pleadings before throwing the matter out of court. Once again, U.S. attorneys are often not used to highly-technical civil cases. So, they may negotiate favorable settlements instead of going to the trouble to re-do the pleadings.
Motion for Summary Judgment
An MSJ resolves most IRS passport revocation cases. This motion basically states that, at the time the case was filed, the action was appropriate. But since then, the taxpayer has applied for innocent spouse relief or taken other action which amounts to an exception. An MSJ is a resolution on the merits and it usually precludes the IRS from bringing another action against the taxpayer’s passport.
An important note here. No one is really sure what happens if the IRS denies the innocent spouse request. Stay tuned on this point.
These motions are appropriate if the IRS has a change of heart and unilaterally decides to reverse the certification. That may happen once in a blue moon.
To defend your rights in an IRS passport revocation matter, reach out to us straightaway. We can show you the full range of options available and help you pick the direction that’s most likely to deliver positive results.
Latest posts by Venar Ayar (see all)
- The Difference Between an Eggshell Audit, Criminal Investigation and Criminal Prosecution - April 18, 2019
- Consequences of Failing to Resolve Your Tax Debt - April 17, 2019
- Can You Negotiate a Tax Lien Withdrawal? - February 12, 2019