How to Decertify or Reverse a Seriously Delinquent Tax Debt

The IRS will reverse a certification and issue a IRS Notice CP508R to reverse a seriously delinquent tax debt when:

  • The tax debt is fully satisfied or becomes legally unenforceable.
  • The tax debt is no longer seriously delinquent.
  • The certification is erroneous.

The IRS will make this reversal within 30 days and provide notification to the State Department as soon as practicable. 

A previously certified debt is no longer seriously delinquent when:

  • You and the IRS enter into an installment agreement allowing you to pay the debt over time.
  • The IRS accepts an offer in compromise to satisfy the debt.
  • The Justice Department enters into a settlement agreement to satisfy the debt.
  • The collection is suspended because you request innocent spouse relief under Tax Code Section 6015.
  • You make a timely request for a collection due process hearing regarding a levy to collect the debt.

The IRS will not reverse certification where a taxpayer requests a collection due process hearing or innocent spouse relief on a debt that is not the basis of the certification. Also, the IRS will not reverse the certification because the taxpayer pays the debt below $50,000.

Although the taxpayer is required to pay the entire amount certified before the IRS will reverse the certification, the IRS will decertify the liability if it is reduced below the threshold for certification for other reasons. For example, reduction in tax due to the filing of a valid return or amended return will cause decertification, but only after the return is processed and posted.

If the IRS abates the penalty so that the liability is below the certification threshold then the taxpayer also may be eligible for decertification; however, not all penalty abatements will result in decertification. For example, penalty abatement under the first-time abatement policy does not result in decertification, even if the adjusted liability is below the threshold amount.

The taxpayer can request expedited decertification when all of the following conditions apply:

  • The taxpayer is eligible for decertification.
  • The taxpayer states that his foreign travel is scheduled within 45 days or less, or the taxpayer lives abroad.
  • The taxpayer has a pending application for passport or renewal and provides his passport application number and, if the taxpayer applied outside the United States, location of passport application.

There may be situations in which a taxpayer residing outside of the United States has an urgent need for a passport without having imminent travel plans. The IRS will give expedited consideration to taxpayers who report that they have an urgent need for decertification and meet the other requirements. Other than the exceptions discussed above, however, the only other potential exception is that the State Department may issue a passport “in emergency circumstances or for humanitarian reasons”.

The IRS is required to send notice of the reversal of the certification to the taxpayer. The timing of the notice of the reversal depends on the reason for it.

If the reversal occurs because the tax debt is fully paid or legally unenforceable, the IRS is not required to make the notification until the date required for issuing a certificate of release of the.

If the reversal is because the taxpayer has elected or requested innocent spouse relief, or because the taxpayer has entered into an installment agreement or an offer in compromise, the notification must be made within 30 days after the election or request. If the certification was erroneous, the IRS must send the notification “as soon as practicable” after it makes the

Our law firm has assisted many clients to reverse or de-certify certification resulting in passport issuance.

Please contact our firm for help.