U.S. Passport Revocation or Non-Issue Because of Seriously Delinquent Federal Tax Debts Upheld in Early Court Cases

A number of months ago we wrote about the subject of passport revocation and non-issue, in part, in these opening words:

In the past history of the country, U.S. persons’ passports or their eligibility for new passports would only rarely have been impacted by Federal tax considerations and never in isolation. Not anymore. During 2018, pursuant to Congressional legislation entitled, Fixing America’s Surface Transportation Act (P.L. 114-94, December 4, 2015), the IRS got up and running a new administrative program whereby IRS Revenue or Collection Agents are now certifying to the U.S. State  Department that a particular U.S. person owes at least $51,000.00 in taxes or tax-related penalties and interest [“seriously delinquent tax debts”]’

We were not sanguine about the effectiveness of high and mighty arguments about the freedom-impinging effects of this law, and had counseled in a general way about resolving IRS tax debts before the State Department takes final action.

Recently, in Robert Rowen v. Commissioner, 156 T.C. No 8 (March 30, 2021), the United States Tax Court declined on procedural grounds Petitioner’s invitation to decide on Petitioner’s arguments that IRS enforcement of this law infringes on a U.S. person’s constitutional liberty to travel internationally, based upon the Fifth Amendment’s bar on federal government deprivation of a U.S. person’s liberty without the due process of law, and, in addition, enforcement obviously conflicts with the United Nation’s Universal Declaration on Human Rights (G.A. Res. 217A (III), U.N. Doc. A/810 (Dec. 10, 1948)).  Consequently, these arguments await their day in this Court. The taxpayer apparently still has his U.S. passport because the State Department has yet to act on the IRS’s notification to it.

Meanwhile, the Federal District Courts have fairly recently decided two U.S. taxpayers’ objections to this law.  In Jones Maehr v. U.S. Department of State, No. 18-CV-02948 – PAB – NRN (D. CO, February 28, 2020), the Court held that enforcement of the law by the State Department did not deny, without due process of law, a U.S. person’s liberty to travel internationally.  In Craig Jones v. Steven Mnuchin et al., CV 119-222 (S.D. GA, March 8, 2021),  the Court held that enforcement of the law by the IRS did not deny, without due process of law, a U.S. person’s liberty to travel internationally.  Both courts also rejected several of what we believe to be less meritorious arguments made by these taxpayers against the law’s enforcement.  As of March 8, 2021, Craig Jones perfected his appeal to the 11th Circuit Court of Appeals.

We have no doubt that the IRS will continue to notify the State Department about those U.S. persons in seriously delinquent tax debts status and the State Department will act, in its discretion more or less expeditiously, to revoke U.S. passports or deny issue of new U.S. passports.  In our view, the practical solution for nearly all taxpayers who owe the IRS more than $51,000, and who desire a valid U.S. passport, remains to resolve their IRS taxes due problems with the IRS before the IRS resorts to seriously delinquent tax debts status notification to the State Department.  Rest assured that the IRS has been resorting to seriously delinquent tax debts status notifications mainly as a last resort, or among their last tax collection efforts, and even had suspended notifications to the State Department for some time during 2020, ostensibly on account of the COVID-19 pandemic.  On the other hand, IRS and U.S. Justice Department attorneys will continue to contest vigorously all taxpayer court challenges to the validity of enforcement of the subject law.

Life in the USA being what it is today, we can’t rule out a U.S. passport revocation case with heart-wrenching facts and excellent legal counsel making its way to the Supreme Court.  The experienced attorneys at Herold Law, P.A., can be of service to you if you find yourself in a loss or non-renewal of U.S. passport predicament.  Please don’t hesitate to contact Robert S. Schwartz, Esq., at 908-647-1022, Ext. 112, or contact him at [email protected].