Dec 09 2015

No passports for US citizens who haven’t paid taxes or don’t have a Social Security number

Buried in the Fixing America’s Surface Transportation Act (“FAST Act”) signed into law last week is an unrelated rider to provide for revocation of the passport and/or refusal to issue a passport to anyone against whom the IRS has assessed a lien or levy for $50,000 or more in tax debt, or who doesn’t provide a valid Social Security number.

Since a change in Federal regulations in 2009 eliminated the last exception for crossing land borders to or from Canada and Mexico, it is a violation of Federal law “for any citizen of the United States to depart from or enter, or attempt to depart from or enter, the United States unless he bears a valid United States passport.”

This requirement for a passport can be “waived” at the “discretion” of the Department of State. But there is no right to a waiver, no formal procedures or standards for requesting such a waiver, and no apparent mechanism for judicial review of denial of a waiver.

So denying or revoking a US passport amounts to closing the US borders to that US citizen.

A US citizen who is denied a passport, or whose passport is revoked, is still a US citizen even if they are unable to exercise the rights of a citizen. As a citizen, they are still liable for US taxes on their worldwide income and assets, even if they are living outside the US. So any tax debt will continue and is likely to increase with interest, penalties, and new taxes.

It’s not clear at whom, or at what conduct, this new provision in US law is directed.

Are Congress and the President concerned that suspected criminal violators of the tax laws might flee the country before they can be charged or arrested? So much for the presumption of innocence, the distinction between tax debts and crimes, and the Constitutional prohibition on imprisonment for debt.

Is the intent to prevent tax debtors from spiriting their untaxed assets out of the country before they can be seized? If so, restrictions on personal movement are both overbroad and likely to be ineffectual. Most international transfers of wealth occur electronically, and most cross-border shipments of tangible goods are in the form of unaccompanied freight, not accompanied luggage.

Is the goal to exile tax debtors from US territory? Many of the US citizens who might be assessed large tax debts are already living outside the US. Under international human rights treaty law, the right to enter the country of one’s citizenship is the most absolute of the rights of freedom of movement: “There are few, if any, circumstances in which deprivation of the right to enter one’s own country could be reasonable.”

Denial or revocation of a US passport under this new law is an elaborate five-step process, although most of the steps are purely clerical:

  1. The IRS “assesses” a tax liability of at least $50,000 in 2016, or the equivalent amount adjusted according to the cost of living index in future years.
  2. The IRS issues a lien or levy for the tax assessment (again, for at least $50,000 or the latest adjusted equivalent).
  3. The Commissioner of Internal Revenue certifies the existence of this assessment and lien or levy to the Secretary of the Treasury (the head of the parent department of the IRS), and notifies the citizen of this certification and of their right to challenge it in court.
  4. The Secretary of the Treasury transmits the IRS certification to the Secretary of State
  5. Once the State Department receives this certification, it must not issue a new passport to the citizen, and may (apparently at the standardless discretion of the Secretary of State) revoke any current passport.

There are some options, but they are entirely at the discretion of the Secretary of State:

If the Secretary of State decides to revoke a passport…, the Secretary of State, before revocation, may — (i) limit a previously issued passport only for return travel to the United States; or (ii) issue a limited passport that only permits return travel to the United States.

The law also permits (although it does not require — more standardless discretion for the Secretary of State) the denial of any application for a US passport that doesn’t include a valid Social Security number.

There’s an impunity clause in the law, although it’s unclear to what if any extent it is Constitutional, that attempts to protect government agents from liability for violating US citizens’ right to travel:

The Secretary of the Treasury, the Secretary of State, and any of their designees shall not be liable to an individual for any action with respect to a certification by the Commissioner of Internal Revenue.

There is a procedure for judicial review, but only of the certification of a tax assessment and lien or levy:

After the Commissioner notifies an individual … , the taxpayer may bring a civil action against the United States in a district court of the United States or the Tax Court to determine whether the certification was erroneous or whether the Commissioner [of Internal Revenue] has failed to reverse the certification. If the court determines that such certification was erroneous, then the court may order the Secretary [of the Treasury] to notify the Secretary of State that such certification was erroneous.

The new law is silent on what, if any, redress is available, or through what procedures, for a US citizen whose right to travel is violated when they are denied a passport, their passport is revoked or restricted, or they are subsequently prevented from entering or leaving the US. Responsibility for the deprivation of rights is divided among three Departments: Treasury certifying a tax debt, State denying or revoking a US passport, and DHS enforcing the passport requirement at airports and borders.

A citizen could bring an action for a writ of mandamus ordering the State Department to issue a passport, which in some other cases has prompted the State Department to issue a passport before the case could be decided.

Or a citizen could bring an action for an injunction prohibiting the DHS from interfering with their entry or exit to or from the US.

In either case, we look forward to a declaratory judgement that this law is unconstitutional, and violates US obligations as a party to the International Covenant on Civil and Political Rights.

13 thoughts on “No passports for US citizens who haven’t paid taxes or don’t have a Social Security number

  1. Any thoughts on whether a bankruptcy discharge of the subject tax liability would entitle one to be decertified, and eligible for a passport?

  2. Pingback: New Collection Challenges | War Tax Talk

  3. @John – Yes, there is a provision in the law for reversal of a certification of tax debt (and for judicial review of the decision on whether to reverse a certification) in several circumstances including if the debt “has been fully satisfied or has become legally unenforceable.”

  4. So, is this effectively a “no fly” list? Because if so, then if Obama’s wishes go forward, they won’t be able to own guns either. And after the IRS’s persecution of Tea Party members through tax audits etc… I’d say we can look forward to anyone who disagrees with the current government being found guilty of tax fraud, owing that debt and then not only being not allowed to travel/leave the country but being disarmed as well.

  5. You would think if their a deadbeat on their finances the government would be happy to get rid of them. The way to get your money is to let them out but not allow them back IN until they have the money they owe you.

  6. So right on!

    This announcement by Obama is exactly the foundation for martial law. We need to see your papers, will become very real. They can suspend your drivers license or Passport if your considered an enemy of the state for any reason they see fit. Not much time left.

  7. It is surprisingly easy to incur a tax bill for over $50,000. Even if the original tax due was a small amount, the fees are huge, and add up quickly. Furthermore, if your spouse is involved in a tax dispute and if you file taxes jointly, you become equally liable for the full amount, even if you had nothing to do with the original problem. This could happen if your spouse is an officer of a company that runs into tax issues. You may not be an employee or member of the board of directors of that company, but the IRS will drag you into the mess anyway. Many, many businesses encounter tax issues, not through any criminal intentions. It’s a bad enough situation as it is, and now they decide to take away the passports of company officers and their spouses. Divorce will not get the spouse out of the tax lien. Mae, be careful who you call a deadbeat. It could easily happen to you.

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  9. It appears that an installment plan would stop the passport ban…any idea if a bankruptcy filing (until the debt is discharged) would also stop the ban?….long live the poor!

  10. Pingback: Papers, Please! » Blog Archive » No Social Security number? No passport. Why?

  11. There was once a state law somewhere that said the Chief of. Police could revoke anyone’s driver license if, “in his opinion,” the poor schmuck couldn’t drive safely. But there were no standards to guide the Chief’s discretion. That statute was thrown out as unconstitutional for violating the Constitutional principle of the separation of powers: it impermissibly delegated a legislative function to the executive branch.

  12. The law! The law! The law!

    Geesh!

    The income tax law we operate under today was promulgated by Congress in June, 1862.
    The 16th Amendment was merely a directive to the 9 US Supreme Court Justices that they could no longer consider the source of the income already within the taxing power of the Congress (as a result of the Pollack case and its rehearing) and created no new power to tax.

    There is no statute of liability requiring payment of a tax on Private Sector labor receipts.
    It’s all fraud, deceit and bluff ( Buffoons – with guns!).

    The attorneys and former IRS/CID Special Agent at Truth-Attack.com offer a $100,000 Cash Reward for the first one to present a copy of the elusive statute – uncollected since first offered in 2007 – Why? Because it doesn’t exist.

    You have all been brainwashed and bamboozled.

    If hind legs aren’t found to stand up and hold these criminals accountable (including the 535 accomplices on Capitol Hill) you will only get more of the same – and it will keep getting worse.
    Here’s an idea – let’s follow the Constitution.

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