The United States Tax Code is a complicated and powerful set of laws. It provides the government with various tools to better ensure compliance. One example: the ability to restrict travel. In some cases, the government can restrict international travel if the taxpayer has a substantial tax bill.
The government does this by using a series of laws. First, the government must show that there is a substantial tax bill as defined within 26 U.S.C. § 7345. Then, based on a provision within the Fixing America’s Surface Transportation (FAST) Act, the government can deny, revoke, or otherwise limit the taxpayer’s passport.
In a recent case, the IRS accused a taxpayer of having over $400,000 in unpaid tax debt. The deemed the taxpayer “seriously delinquent” for the purposes of this law and limited his ability to travel. The taxpayer fought back. He filed a case against the Internal Revenue Service (IRS) and requested summary judgment. If granted, this would essentially result in a win for the taxpayer.
The taxpayer had two arguments. First, he argued that the court should grant his request because the government’s action was a violation of the Due Process Clause of the Fifth Amendment to the Constitution. Second, he argued the limitation was a violation of his basic human rights as outlined in the Universal Declaration of Human Rights (UDHR).
The government countered that their actions did not violate taxpayer’s rights. Instead, it stated the law the taxpayer used only certified the presence of facts about his tax bill — not the restriction to travel.
What did the court decide?
The Tax Court found that Code § 7345 does not violate the Fifth Amendment Due Process Clause or the Universal Declaration of Human Rights since it merely provides for the certification of certain tax-related facts and does not restrict the right to international travel.
Interestingly, the court notes the taxpayer may have had a stronger argument if he had continued his argument on I.R.C. § 7345 instead of the Universal Declaration of Human Rights.
It is important to explore all legal claims when moving forward with these types of cases to better ensure success. The attorneys at Goldburd McCone have experience in these types of cases and can discuss these and other legal remedies available for taxpayers in similar situations.