Tax Court ruling concerning the IRS Notice for Passport Revocation.
The Tax Court has held that a taxpayer’s tax liabilities constituted a “seriously delinquent tax debt” under Code Sec. 7345, and the IRS’ certification to the Secretary of State was not erroneous. Both the IRS and the taxpayer agreed that the taxpayer owed over $100,000 in unpaid, legally enforceable federal income tax liabilities and frivolous return penalties relating to eight tax years. The IRS determined this was a seriously delinquent tax debt and certified it to the Secretary of State.
The taxpayer asked the Tax Court to review the certification, alleging that the IRS failed to make a levy under Code Sec. 6331, as required under Code Sec. 7345(b)(1)(C)(ii). According to Code Sec. 6331, the IRS relied mainly on Forms 4340 (Certificate of Assessments and Payments) to demonstrate levies. The Court pointed out that the Forms 4340 for each of the periods and tax liabilities at issue reflected that the IRS (1) issued a notice of intent to levy via certified mail, (2) received a signed return receipt from the taxpayer, and (3) made an initial levy five years ago. The Court held that the IRS satisfied the requirement that the levy be made under Code Sec. 6331.