Tax Resolution Academy - r

A tax practitioner I know had a client walk in because he had a trip he could not miss. With these cases the reason is almost always personal. A wedding overseas, a funeral, a sick family member, and sometimes a business trip that could not wait.

This client went to renew his passport, and that is when he found out he had been certified. The renewal stopped cold, and so did his travel plans.

The CP508C notice had gone to his last known address, showing the combined total across all periods that led to certification. He had moved a couple of years back and never saw it. He was not discovering something new, he was just finally running into it, at the worst possible time.

That is why these cases have to move quickly. Once a client is ready to resolve it, the IRS still needs at least 30 days to reverse the certification, and getting into a resolution option takes time of its own before that clock even starts. Then routine passport processing runs 4 to 6 weeks, expedited runs 2 to 3 weeks, not counting mailing time. The faster you handle it, the less chance any of it delays the client renewing or getting their passport.

Do you ask clients about a recent move as part of your standard intake on these cases?

A client of mine assumed his practitioner would automatically be notified the moment his passport case got certified. That is not how it works.
Notice CP508C goes to the taxpayer's last known address by regular mail. From there, the State Department holds the application for 90 days before denying it, which gives room to pay the debt in full, set up a satisfactory payment arrangement, or resolve an erroneous certification.
It is a lot like a bank levy holding funds for 21 days before release. Different length, same idea, act inside the window or lose the outcome you wanted.
How do you make sure you find out about a case like this before the 90 days start running out?

A colleague of mine once added a client's FBAR penalty into their passport certification total. It does not belong there, and the client's real number was actually much lower.

What counts toward seriously delinquent tax debt includes individual income taxes, Trust Fund Recovery Penalties (TFRP), and business taxes the individual is personally liable for. What does not count includes criminal restitution, child support obligations, and Report of Foreign Bank and Financial Accounts (FBAR) assessments, since FBAR runs under Title 31 instead of Title 26 and sits on an entirely separate system.

Have you run into a client's number being off because something got counted that should not have been?

A practitioner I know quoted an old threshold number to a client last year and had to walk it back. This figure moves every year, and it is easy to work from a number that is already stale.

Seriously delinquent tax debt means an assessed, unpaid federal tax liability over the current threshold, paired with either a filed Notice of Federal Tax Lien with lapsed appeal rights, or an issued levy. The threshold itself started at $50,000 back in 2017 and climbs with inflation each year. For 2026, it is $66,000.

Do you have a habit of double checking this number before a client conversation, or does it usually come up on the fly?

A client of mine called in a panic last year after his passport application got rejected. He kept saying revoked, but that was not actually what happened to his case.

What happened was certification, the IRS systematically flagging his account as having a seriously delinquent tax debt and notifying the Department of State. Once his balance was resolved, decertification followed, which is what let his application move forward again.

Two different terms, two different stages of the same case. Do your clients usually know the difference, or does that conversation start with you?