In late 2015, as we noted at the time, Congress voted — as part of an unrelated surface transportation bill — to authorize the Department of State to revoke and/or refuse to issue a U.S. passport to anyone against whom the IRS has assessed an administrative lien or levy (even in the absence of any judicial action) for $50,000 or more in tax debt.
This week, the first appellate court to review this law upheld it as Constitutional, although on limited grounds. In its “per curiam” opinion in Maehr v. Department of State, the 10th Circuit Court of Appeals upheld a decision by a U.S. District Court judge in Colorado dismissing a lawsuit by Jeffrey T. Maehr, one of almost half a million people who have been deemed subject to revocation or non-issuance of U.S. passports, and thus prohibited from legally leaving (or returning to) the U.S., for alleged tax debts.
Two judges wrote opinions in support of the “per curiam” decision, each joined in different parts by the third member of the three-judge panel.
All three judges found (wrongly, we think) that, although there is some sort of “right” to international travel by U.S. citizens, it is not such a “fundamental” right as to make restrictions on the exercise of the right to travel be subject to to what courts call “strict scrutiny”.
Two of the three judges opined that restrictions on the right to travel are subject only to the most deferential standard of judicial review, and should be permitted as long as the government agency imposing the restrictions can show any “rational basis” at all for the restriction. In this instance, the government made no attempt to argue that there was any particular relationship between tax delinquency and fitness to travel:
The scheme’s rationale appears to have been simply to use the threat of passport revocation as an incentive for tax compliance. No direct connection between tax delinquency and international travel, such as evidence the delinquent taxpayer is secreting assets overseas, is required to effect a passport revocation. Review of the legislative history also yields no evidence that passport revocation was aimed at, for example, thwarting delinquent taxpayers from fleeing the country or evading tax collection…. Rather, a straightforward incentive mechanism — making tax delinquency more painful by inhibiting one’s ability to enter or exit the country —explained why the Senate Finance Committee “believe[d] that tax compliance [would] increase if issuance of a passport is linked to payment of one’s tax debts.”
Passport revocation under the FAST Act is thus an example of a species of tax penalties known as collateral sanctions. “Unlike traditional tax penalties that require noncompliant taxpayers to pay money to the taxing authority, collateral tax sanctions require noncompliant taxpayers to forfeit a nonmonetary government benefit or service.”
Two of the three members of the 10th Circuit panel found that providing this incentive for paying taxes is a sufficient “rational basis” for imposing this collateral consequence.
The third member of the panel concluded, after a lengthy analysis of the right to travel, that it should be subject to “intermediate scrutiny” — a level of judicial review in between “rational basis” review and “strict scrutiny”. But this judge concurred in the decision anyway because the plaintiff/appellant (originally pro se, probably because their tax liabilities made them unable to afford a lawyer, but represented on appeal by pro bono lawyers appointed by the court) had not made a sufficient argument with respect to the criteria for “intermediate scrutiny”.
Unfortunately but unsurprisingly, none of the members of the panel discussed the right to travel in terms of the international human rights treaties to which the U.S. is a party. These treaties recognize a much more explicit and clearly fundamental right to travel.
We think this decision of the 10th Circuit is wrong, and we hope that other judges hearing challenges to passport revocations or denials apply a higher level of judicial scrutiny.