Garcia v. Commissioner: Expanded Judicial Review for Passport Revocation Under IRC Sec. 7345

In the 2025 case Garcia v. Commissioner (Garcia), the United States Tax Court addressed a significant procedural question concerning the scope of judicial review under IRC Sec. 7345. This provision authorizes the IRS to certify a taxpayer as having a “seriously delinquent tax debt,” which may result in the denial, revocation, or limitation of a US passport. The court’s opinion clarifies that review of such certifications is not confined to the administrative record but may proceed de novo.  

Statutory Framework for Passport Revocation  

Under IRC Sec. 7345, the IRS may certify a taxpayer’s debt as “seriously delinquent” if the following conditions are met: 

• The taxpayer has an unpaid, legally enforceable federal tax liability exceeding a statutory threshold ($62,000 in 2025, adjusted annually for inflation) 
• The IRS has either filed a Notice of Federal Tax Lien and exhausted administrative remedies or issued a levy 

Upon certification, the IRS issues Notice CP508C to the taxpayer that the State Department may deny or revoke the taxpayer’s passport.  

Exceptions to Certification  

The IRS is prohibited from certifying a taxpayer’s debt under certain circumstances, including where the taxpayer is:

• In bankruptcy 
•  A victim of tax-related identity theft 
•  Residing in a federally declared disaster area 
•  In a pending installment agreement or Offer in Compromise 
•  In a pending Collection Due Process hearing involving a levy 
•  Seeking innocent spouse relief under IRC Sec. 6015  

Prior to the revocation of an existing passport, the IRS typically issues Letter 6152, affording the taxpayer 30 days to resolve the delinquency.  

Reversal of Certification 

A certification may be reversed upon full payment of the tax debt or under the following conditions: 

• Entry into an installment agreement 
• Submission of an Offer in Compromise 
• Approval of a request for innocent spouse relief
• Determination that the debt is currently not collectible 
• Filing for bankruptcy
• Residence in a federally declared disaster area 

Upon resolution, the IRS will issue Notice CP508R and notify the State Department, generally within 30 days. Expedited decertification is available if the taxpayer: 

• Is eligible for decertification 
• Provides evidence of imminent international travel (within 45 days) 
• Submits documentation of a pending or recently denied passport application 

Background of Garcia v. Commissioner

The petitioner, Alberto Garcia, Jr., was certified by the IRS as having a seriously delinquent tax debt exceeding $100,000. Pursuant to IRC Sec. 7345(a), the IRS transmitted this certification to the US Department of State, thereby initiating restrictions on Garcia’s passport privileges. Garcia contested the certification, asserting that the underlying liability was not legally enforceable due to improper service of process in a prior district court proceeding. That proceeding had resulted in a default judgment, which extended the statute of limitations for collection. 

Tax Court’s Holding 

The central issue before the Tax Court was whether its review under IRC Sec. 7345(e) is limited to the administrative record or whether the court may consider new evidence and conduct a de novo review. The Court held that the appropriate standard of review is de novo, allowing the introduction and consideration of evidence outside the administrative record. The Court based its conclusion on the statutory language of IRC Sec. 7345(e), which provides that a taxpayer may petition the Tax Court to “determine whether the certification was erroneous or whether the Commissioner has failed to reverse the certification.” The Court interpreted the term “determine” as indicative of congressional intent to authorize an independent judicial inquiry, rather than a deferential review of the IRS’s administrative decision. 

The Tax Court’s decision in Garcia establishes that taxpayers challenging passport-related certifications under IRC Sec. 7345 are entitled to a full evidentiary hearing. This interpretation permits the court to resolve material factual disputes—such as the validity of prior judicial proceedings affecting the enforceability of the debt—based on a record developed at trial. While the Court acknowledged that many IRC Sec. 7345 cases may be resolved on the basis of the administrative record, it emphasized that de novo review is appropriate where factual or legal issues remain in dispute. This holding significantly broadens the scope of judicial review in passport revocation cases and enhances procedural protections for affected taxpayers. 

The Tax Court’s decision in Garcia v. Commissioner represents a pivotal development in the interpretation of IRC Sec. 7345. By affirming the availability of de novo review in passport-related tax cases, the court has expanded the procedural rights of taxpayers and clarified the judicial role in reviewing IRS certifications. 

Passport revocation is just one tool the IRS can use when taxpayers have delinquent tax accounts. Taxpayers with seriously delinquent tax accounts should reach out to our team for guidance.