The Internal Revenue Code Section 7345 is Not Unconstitutional.
In Craig Thomas Jones, plaintiff, v. Steven T. Mnuchin, in his official capacity as Secretary of the Treasury; Charles P. Rettig, in his official capacity as Commissioner of Internal Revenue; Michael Pompeo, in his official capacity as Secretary of State; and THE UNITED STATES, Defendants, the United States District Court for the Southern District of Georgia found that section 7345 is not unconstitutional.
Mr. Jones challenged section 7345 on its face and he argued that the statute infringes on the right to international travel. He claimed that the right to travel is a fundamental one and thus the court must apply the strict scrutiny standard of review, or in the alternative, the right is “important enough to warrant an intermediate scrutiny standard.” Mr. Jones asked the Court to find that the right to international travel is fundamental. The defendants filed a motion for summary judgment. The plaintiff filed a cross-motion for summary judgment and a motion for hearing.
Mr. Jones is unable to renew his passport because of his past due federal tax liability. He has accumulated federal income tax liability for the years 2000, 2002, 2005, 2006, 2008, and 2009, which totaled $404,928.24. As a result, the Department of the Treasury, through the Internal Revenue Service (IRS), certified Plaintiff as having “seriously delinquent tax debt” pursuant to section 7345 of the Internal Revenue Code. The Department of State issued a letter to Mr. Jones explaining that he is “ineligible to receive passport services” due to the certification. Mr. Jones did not object to the debt. However, he claimed the denial was not constitutional.
Internal Revenue Code section 7345 was enacted pursuant to Section 32101 of the Fixing America’s Surface Transportation Act (the “FAST Act”) to increase tax compliance. Section 7345 states: “If the Secretary of the Treasury receives certification by the Commissioner of Internal Revenue that an individual has a seriously delinquent tax debt, the Secretary shall transmit such certification to the Secretary of State for action with respect to denial, revocation, or limitation of a passport.” Seriously delinquent tax debt is debt that is greater than $50,000. Before the IRS can certify a tax debt as seriously delinquent, it must be assessed. “A tax liability will not be assessed by the IRS until the amount of the liability has been determined through an administrative process that provides the taxpayer with notice and an opportunity to challenge the IRS’s position . . . including the right to petition the United States Tax Court for a redetermination . . . and the right to appeal an adverse Tax Court decision to the Court of Appeals for the relevant circuit.” Section 7345 and its subsections establish and clarify all the procedures that must be followed. Mr. Jones did not contest the procedures. Mr. Jones challenged the denial of his right to renew his passport under several provisions of the United States Constitution.
Constitutionality Challenges to Section 7345
Plaintiff challenged Section 7345 under 1) the First Amendment, 2) the Ninth Amendment, 3) the Fifth Amendment, 4) the Fourteenth Amendment, and 5) the Privileges and Immunities Clause as sources of the right.
- First Amendment.
Mr. Jones, the Plaintiff, claimed “the First Amendment is another doctrinal source of the right to travel both internationally and at home.” However, the Court found that Plaintiff offered no explanation as to how the First Amendment is implicated in his case. Defendants argued that “Section 7345 does not require that delinquent taxpayers surrender their First Amendment rights, and the Court agreed. The Court ruled that Plaintiff has no First Amendment claim.
- Ninth Amendment.
Plaintiff cited the Ninth Amendment for support. Nonetheless, he conceded that the Ninth Amendment is “not an independent source of rights in itself.” It is well established that “the Ninth Amendment standing alone houses no constitutional guarantees of freedom.” Consequently, the Court stated that the Ninth Amendment provides no basis for Plaintiff’s claim.
- Fourteenth Amendment.
Plaintiff discussed substantive due process in the context of the Fourteenth Amendment. “The Due Process Clause of the Fourteenth Amendment provides ‘nor shall any State deprive any person of life, liberty, or property, without due process of law.” The Court noticed that there is no state action in this case and thus Mr. Jones has no claim under the Fourteenth Amendment.
- Privileges & Immunities Clause.
Mr. Jones also pointed to the Privileges and Immunities Clause in Article IV, Section 2 of the Constitution as a source of the right to international travel. The Privileges and Immunities Clause provides that “the Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.” Mr. Jones acknowledged that the Privileges and Immunities Clause applies to state action and not federal action. It “prevents a state from discriminating against citizens of other states in favor of its own.” Mr. Jones cited various Supreme Court precedent. However, the Supreme Court has never “held an action taken by any branch of the federal government is subject to scrutiny under the Privileges and Immunities Clause.” Further, because other circuits have expressly held that the Privileges and Immunities Clause does not apply to federal action, the Court ruled the Privileges and Immunities Clause provides no basis for Plaintiff’s claim.
- Fifth Amendment
Based on Supreme Court precedent, the Court stated, the right to international travel is more properly analyzed in the context of Fifth Amendment Due Process. The Fifth Amendment provides that “no person shall be deprived of life, liberty, or property, without due process of law.” Mr. Jones alleged that his Fifth Amendment rights to substantive and procedural due process have been violated.
Substantive Due Process
The substantive component of the Fifth Amendment’s guarantee of due process of law “forbids the government to infringe certain ‘fundamental’ liberty interests at all, no matter what process is provided, unless the infringement is narrowly tailored to serve a compelling state interest. The Court agreed that there is no dispute that there is a constitutional right to international travel. In Kent, 357 U.S. at 129 “A Passport’s crucial function today is control over exit. And, as we have seen, the right of exit is a personal right included within the word ‘liberty’ as used in the Fifth Amendment.” However, the Supreme Court, in Haig v. Agee, 453 U.S. 280, 306 (1981), has made evident that “the freedom to travel outside the United States” is not the same as the “right to travel within the United States.” While “[t]he constitutional right of interstate travel is virtually unqualified . . ., the “right” of international travel has been considered to be no more than an aspect of the ‘liberty’ protected by the Due Process Clause of the Fifth Amendment. In Califano v. Aznavorian, the Court concludes “legislation which is said to infringe the freedom to travel abroad is not to be judged by the same standard applied to laws that penalize the right of interstate travel.”
Mr. Jones asks the Court to find that the right to international travel is fundamental. The court stated that the Supreme Court has been presented with multiple opportunities to do so and has not. The Supreme Court cautions lower courts to “exercise the utmost care whenever . . . asked to break new ground in this field. “Courts should exercise great resistance to expanding the substantive reach of the Due Process Clause of the Fifth Amendment, particularly if it requires redefining the category of rights deemed to be fundamental.” Consequently, this Court will not expand substantive due process by recognizing a new fundamental right.
Mr. Jones’s main argument is that Section 7345, which restricts passports to those with “seriously delinquent tax debts,” is distinguishable from 42 U.S.C. Sec. 652(k), which allows the Secretary to “revoke, restrict, or limit a passport issued previously” to an individual that “owes arrearages of child support in an amount exceeding $2,500.
Among others, Mr. Jones argued “child support debts are not ordinary debts . . . unlike individual tax debts with their trivial impact on the nation’s multi-trillion-dollar budget” and “the lives of children are a more compelling interest than adding pennies to the Treasury.” The Court argued that even if the government has a “more compelling” interest in protecting children, that does not take away from the fact that the government also has a legitimate interest in collecting tax debts. In this case, the Court has already determined the government has a legitimate and significant interest in collecting seriously delinquent tax debts. “Plaintiff has offered no argument that this interest is not rationally related to the Secretary’s authority to revoke passports to those with such debts” the Court asserted. As the Ninth Circuit explained in Eunique: “Surely it makes sense to assure that those who do not pay their child support obligations remain within the country, where they can be reached by our processes in an at least relatively easy way. Notably, even when the Court reiterated the constitutional right to travel in Kent, . . . it, without disapproval, took notice of a long-standing policy of denying passports to those who were “trying to escape the toils of the law” or “engaging in conduct which would violate the laws of the United States.” A person who fails to pay child support may well attempt to escape the toils of the law by going abroad and may even be violating the laws of the United States.” The Court found the same rationale can be applied to tax debts and Section 7345 passes rational basis review, and therefore, Mr. Jones’s substantive due process challenge is rejected as a matter of law.
Mr. Jones also argued “the statute fails to survive even minimum scrutiny in light of analogous ne exeat cases under which there is no rational basis to prevent a taxpayer from leaving the country unless there is violation of a court order or the hiding of assets overseas.” The power to issue a writ ne exeat republica is codified under IRC section 7402 that states: “The district courts of the United States at the instance of the United States shall have such jurisdiction to make and issue in civil actions, writs and orders . . . of neexeat republica . . . for the enforcement of the internal revenue laws.” The Court reasoned that a writ of ne exeat republica was not an issue in this case. Instead, Section 7345 is being used to enforce tax laws. The Court stated that it agrees with the District Court of Colorado that the predicates required for a writ ne exeat under Section 7402 are not applicable because “the statute under which the government revoked plaintiff’s passport, Section 7345, is separate and distinct.
The court for the reasons set forth above ruled that Mr. Jones’s cross-motion for summary judgment and motion for hearing are denied, and Defendants’ motion for summary judgment is granted.
Internal Revenue Code Section 7345 is constitutional.
*CV119-222 (S.D.Ga. Mar.8.2021).*Notice of Appeal filed by Craig Thomas Jones on March 18, 2021.
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