Robert Rowen
P moved for summary judgment on the basis that
R filed a cross-motion for summary judgment alleging that (1)
Served 03/30/21
Held, further, for the same reason,
Held, further, P has abandoned his claim that
Held, further, R has established that he is entitled to judgment as a matter of law that no portion of P‘s seriously delinquent tax debt is unenforceable by operation of the period of limitations on collection.
Held, further, R did not err in certifying that P has a seriously delinquent tax debt within the meaning of
Sandeep Singh, for petitioner.
Lisa P. Lafferty, John S. Hitt, and Douglas S. Polsky, for respondent.
OPINION
TORO, Judge: For more than two decades, petitioner, Robert Rowen, failed to pay his Federal tax as required by law. The Internal Revenue Service (“IRS“) attempted to collect the outstanding amounts through its usual means--sending demands, filing liens, attempting to levy on assets--all without much success. In
Enacted in 2015, section 7345 authorizes the Commissioner to send to the Secretary of the Treasury a certification that an individual has a “seriously delinquent tax debt.” The Secretary of the Treasury in turn must transmit that certification to the Secretary of State “for action with respect to denial, revocation, or limitation of a passport pursuant to section 32101 of the * * * [Fixing America‘s Surface Transportation Act (‘FAST Act‘), Pub. L. No. 114-94, 129 Stat. at 1729 (2015)].” Sec. 7345(a).
Applying his authority under section 7345, the Commissioner certified that Dr. Rowen has a seriously delinquent tax debt. That certification was sent to the Secretary of State. According to the record before us, the Secretary of State has not undertaken any action to revoke Dr. Rowen‘s passport.
After receiving notification of the Commissioner‘s certification, Dr. Rowen filed a petition in our Court under section 7345(e). His motion for summary judgment followed. In it, Dr. Rowen asks us to determine that the Commissioner‘s
Background
The following background statement is drawn from the parties’ pleadings and motion papers, including the administrative record, as supplemented by the parties, which was attached to the Commissioner‘s motion for summary judgment. The relevant facts in the background statement are summarized solely for the purpose of resolving the pending motions and are not in dispute. Dr. Rowen resided in California when he petitioned this Court.
Dr. Rowen, a U.S. citizen, is a medical doctor licensed to practice in California. He frequently travels to developing countries to offer mеdical services free of charge to populations that would not otherwise have access to adequate medical care. He also has family members in Singapore and mainland China, where he travels for personal reasons.
B. Dr. Rowen‘s Failure To Comply With His Federal Tax Obligations
For more than two decades, Dr. Rowen has repeatedly failed to file Federal income tax returns. As relevant to this case, Dr. Rowen first failed to file a timely income tax return for tax year 1994. In April 1997, Dr. Rowen was indicted on, and pleaded guilty to, one count of corruptly endeavoring to impede an IRS investigation of his activities. As required by his plea agreement, Dr. Rowen filed delinquent income tax returns for 1994 and 1996 on March 15, 1998, and timely filed his 1997 income tax return on April 15, 1998. The IRS issued to Dr. Rowen a notice of deficiency for tax year 1994. Dr. Rowen did not petition this Court for redetermination, and the 1994 deficiency was assessed on May 22, 2000. On April 23, 2000, Dr. Rowen submitted amended returns for tax years 1996 and 1997. The IRS processed Dr. Rowen‘s amended returns and assessed the amounts reported on those returns on June 19 and July 31, 2000, respectively.
Despite his prior plea agreement, Dr. Rowen again stopped filing income tax returns starting with 2003. It was only after the IRS generated a substitute for return for tax year 2007 in July 2009 that Dr. Rowen submitted returns for tax years 2003 through 2007. But Dr. Rowen failed to pay the amounts due reflected in those returns, so the IRS filed notices of Federal tax lien (“NFTLs“) and mailed notices of filing the NFTLs to Dr. Rowen. The IRS also issued notices of intent to levy against Dr. Rowen relating to his unpaid liabilities for tax years 2003 through 2007.2 In response, Dr. Rowen timely filed a request for a hearing with IRS
On December 27, 2012, Dr. Rowen timely petitioned this Court at docket No. 31141-12L for review of the notice of determination. On October 28, 2014, we entered a stipulated decision sustaining IRS Appeals’ determination in full.
C. Certification Under Section 7345
Dr. Rowen has not fully paid the assessed income tax liabilities for tax years 1994, 1996, 1997, and 2003 through 2007. To facilitate collection of the tax owed and acting under the newly granted authority of section 7345, on or about July 16, 2018, the Commissioner certified Dr. Rowen as an individual owing a seriously delinquent tax debt. The certification was sent to the State Department
D. Dr. Rowen‘s Passport
Dr. Rowen held a valid passport when the certification was made. That passport expires in November 2024. Although the State Department was empowered to revoke Dr. Rowen‘s passport after receiving the certification, the State Department, as of August 20, 2020, had not informed Dr. Rowen of any adverse action with respect to his existing passport.3
E. Proceedings in This Court
On September 12, 2018, Dr. Rowen filed a petition in our Court under section 7345(e)(1). The cross-motions for summary judgment now before us followed in due course.
I. Scope and Standard of Review Under Section 7345
Summary judgment expedites litigation and avoids costly, time-consuming, and unnecessary trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). In cases that are subject to a de novo scope of review, this Court may grant summary judgment when there is no genuine dispute as to any material fact and a decision may be rendered as a matter of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff‘d, 17 F.3d 965 (7th Cir. 1994). In cases that are decided on the administrative record (record rule cases), this Court ordinarily decides the issues raised by the parties by reviewing the administrative record using a summary adjudication procedure. See Van Bemmelen v. Commissioner, 155 T.C. ___, ___ (slip op. at 24-26) (Aug. 27, 2020) (summarizing the relationship between scope and standard of review and the standard of summary adjudication).
This is the first occasion on which this Court has considered the mеrits of a certification pursuant to section 7345. See Ruesch v. Commissioner, 154 T.C. 289 (2020) (considering section 7345 but concluding that the taxpayer‘s challenges to the merits of the certification were moot). Although a court reaching a decision on the merits ordinarily must consider both the scope of review (that is, what evidence
II. FAST Act Section 32101
We turn now to FAST Act section 32101 in general and section 7345 in particular.
A. Structure of FAST Act Section 32101
Congress enacted section 7345 as part of FAST Act section 32101. FAST Act section 32101 included nine subsections, seven addressing operative rules and two addressing housekeeping matters.4
The remaining three operative subsections--subsections (e), (f), and (g)--provided rules applicable to the Secretary of State and were subsequently codified in title 22 of the United States Code.
We consider some of these provisions in greater detail below.
B. Section 7345
Section 7345(a) provides:
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 [of the Treasury] shall transmit such certification to the Secretary of State for action with respect to denial, revocation, or limitation of a passport pursuant to section 32101 of the FAST Act.
Section 7345(b)(1) generally defines a “seriously delinquent tax debt” as an “unpaid, legally enforceable Federal tax liability” that “has been assessed,” “is
Section 7345(c) provides rules for reversing a certification. It requires the Commissioner to “notify the Secretary (and the Secretary shall subsequently notify the Secretary of State) if such certification is found to be erroneous [by a court under section 7345(e) as described below] or if the debt with respect to such
The Court‘s jurisdiction to consider this case is found in section 7345(e), which provides as follows:
SEC. 7345(e). Judicial Review of Certification.--
(1) In general.--After the Commissioner notifies an individual under subsection (d), the taxpayer may bring a civil action against the United States in a district court of the United States, or against the Commissioner in the Tax Court, to determine whether the certification was erroneous or whether the Commissioner has failed to reverse the certification. For purposes of the preceding sentence, the court first acquiring jurisdiction over such an action shall have sole jurisdiction.
(2) Determination.--If thе court determines that such certification was erroneous, then the court may order the Secretary to notify the Secretary of State that such certification was erroneous.
Section 7345(e) does not set any deadline for filing the civil action it authorizes. Once the Commissioner notifies a taxpayer that a certification under section 7345(a) has been made, the taxpayer may challenge that certification in a civil action filed either in this Court or in a Federal District Court. The court first acquiring jurisdiction over a certification challenge has sole jurisdiction over that action. Sec. 7345(e)(1).
As just described, under section 7345(a), a certification that an individual has a seriously delinquent tax debt must be transmitted to the Secretary of State “for action with respect to denial, revocation, or limitation of a passport pursuant to section 32101 of the FAST Act.”
The relevant action by the Secretary of State is authorized by FAST Act section 32101(e), codified as subsection (e) of
(e) Authority To Deny or Revoke Passport.--
(1) Denial.--
(A) In general.--Except as provided under subparagraph (B), upon receiving a certification described in section 7345 of title 26 from the Secretary of the Treasury, the Secretary of State shall not issue a passport to any individual who has a seriously delinquent tax debt described in such section.
(B) Emergency and humanitarian situations.--Notwithstanding subparagraph (A), the Secretary of State may issue a passport, in emergency circumstances or for humanitarian reasons, to an individual described in such subparagraph.
(2) Revocation.--
(A) In general.--The Secretary of State may revoke a passport previously issued to any individual described in paragraph (1)(A).
(B) Limitation for return to United States.--If the Secretary of State decides to revoke a passport under subparagraph (A), 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.
(3) Hold harmless.--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 under section 7345 of title 26.
In accordance with that statute, once the Secretary of State receives notice of the certification, the Sеcretary of State is required (absent emergency or humanitarian considerations) to deny a passport (or renewal of a passport) to a seriously delinquent taxpayer and is permitted to revoke any passport previously issued to such person. See 84 Fed. Reg. 67184, 67184-67186 (Dec. 9, 2019) (to be codified at 22 C.F.R. pt. 51).
Under FAST Act section 32101(g), if the Secretary of State receives notice from the Secretary of the Treasury that an individual no longer has a seriously delinquent tax debt, the Secretary of State must remove the certification from the individual‘s record.8
To summarize the foregoing, the FAST Act authorizes different Government actors to make different decisions and carry out different actions. Pursuant to section 7345, the Commissioner is charged with determining whether a seriously delinquent tax debt еxists, making a certification of that fact, and notifying the taxpayer of that certification. Also pursuant to section 7345, the Secretary of the Treasury is charged with transmitting the certification made by the Commissioner to the Secretary of State. By contrast, pursuant to FAST Act section 32101(e), the Secretary of State acts with respect to the passport of an individual who has been certified to have a seriously delinquent tax debt. The Secretary of State is permitted, in his discretion, to revoke a passport that has already been issued. And he is prohibited from issuing a new passport or renewing an expiring one, although the prohibition is not absolute. He retains discretion to issue a new passport or renew an expiring one “in emergency circumstances or for humanitariаn reasons.” FAST Act sec. 32101(e)(1)(B).
In short, the actions of the Commissioner, the Secretary of the Treasury, and the Secretary of State are governed by separate and distinct rules, which impose
III. Dr. Rowen‘s Motion for Summary Judgment
Dr. Rowen claims he is entitled to judgment as a matter of law. He argues that section 7345 is unconstitutional because it violates the Fifth Amendment‘s Due Process Clause. In addition, he advances a theory (not set out in the petition) that section 7345 violates his right to travel under the UDHR. We address each of Dr. Rowen‘s arguments below.
We note as an initial matter that section 7345(e)(1) authorizes us to “determine whether the certification was erroneous.” In general, an action is “erroneous” if it is “[i]ncorrеct” or “inconsistent with the law or the facts.” Black‘s Law Dictionary 659 (10th ed. 2014); see also Merriam-Webster‘s Collegiate Dictionary 425 (11th ed. 2014) (defining “erroneous” as “containing or characterized by error: MISTAKEN“); cf. Kasper v. Commissioner, 150 T.C. at 23 (examining whether an agency‘s decision was “based on an erroneous view of the law or a clearly erroneous assessment of the facts” (quoting Fargo v. Commissioner, 447 F.3d 706, 709 (9th Cir. 2006), aff‘g T.C. Memo. 2004-13)). Of course, if section 7345 were unconstitutional, any certification made under that section would be inconsistent with law and therefore erroneous. See, e.g., Norton v. Shelby Cty., 118 U.S. 425, 442 (1886) (“An unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed.“). We therefore have authority under section 7345(e) to review Dr. Rоwen‘s arguments. See, e.g., Battat v. Commissioner, 148 T.C. 32, 46 (2017) (noting that this Court, like all Federal courts, may adjudicate constitutional questions that arise within its jurisdiction and collecting authorities); see also, e.g., Conard v. Commissioner, 154 T.C. 96, 97 (2020) (reviewing and upholding the constitutionality of section 72(t) in a deficiency case).
A. Dr. Rowen‘s Fifth Amendment Argument
Dr. Rowen claims that ”
The plain text of section 7345 imposes no prohibition on international travel.9 Section 7345 merely provides a process by which the Commissioner may
First, section 7345 gives the Commissioner no power to order the revocation or denial of a passport of a U.S. citizen. As we just discussed, section 7345 simply authorizes the Commissioner to certify the existence of a seriously delinquent tax debt based on the presence of certain tax-related facts (for example, an outstanding liability for an assessed tax in excess of a specified amount, the existence of a lien or levy, and the absence of proceedings before IRS Appeals). A provision other than section 7345 (FAST Act section 32101(e)) gives a different government actor (the Secretary of State) power to act with respect to a passport after receiving a certification made by the Commissioner. FAST Act section 32101(e) requires the Secretary of State to exercise his own judgment in determining whether to revoke a passport and whether to issue a new passport (or renew an existing one) for emergency or humanitarian reasons. In short, only the Secretary of State, not the
Second, as far as the record shows, Dr. Rowen‘s passport remains in effect. Not only has the Commissioner (who has no such power) not revoked it, but even the Secretary of State (the relevant Government actor with authority to act with respect to Dr. Rowen‘s passport) has not taken any adverse action against Dr. Rowen.
Dr. Rowen spends considerable effort in his motion attempting to show that the right to international travel is a fundamental right and that its infringement is subject to review under strict scrutiny. But, as the foregoing discussion makes clear, we need not decide these issues here. Regardless of the nature of the right to travel internationally (fundamental or not) and regardless of the standard of review under the Constitution (strict scrutiny, intermediate scrutiny, or rational basis), see, e.g., Eunique v. Powell, 302 F.3d 971 (9th Cir. 2002) (reflecting differing opinions on this issue), a statutory provision (
The constitutionality of the authority granted to the Secretary of State by FAST Act section 32101(e) is not before us, and we express no view on that issue. See Wash. State Grange v. Wash. State Republican Party, 552 U.S. 442, 450 (2008) (“[It is a] fundamental principle of judicial restraint that courts should neither ‘anticipate a question of constitutional law[‘] * * * nor ‘formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied.‘” (quoting Ashwander v. Tenn. Valley Auth., 297 U.S. 288, 346-347 (1936) (Brandeis, J., concurring))).
B. Dr. Rowen‘s UDHR Argument
Dr. Rowen also maintains that
Regardless of Dr. Rowen‘s misreading of Sosa, however, as with his constitutional argument concerning
IV. The Commissioner‘s Cross-Motion for Summary Judgment
In his cross-motion for summary judgment, the Commissioner maintains that his certification was proper and that he is entitled to judgment as a matter of law. As we explain below, we agree.
A. Dr. Rowen‘s Procedural Due Process Challenge and Statute of Limitations Claim
We begin by considering two arguments that Dr. Rowen raised in his petition but chose not to advance in his motion for summary judgment. Specifically, Dr. Rowen alleged in his petition that
1. Dr. Rowen‘s Procedural Due Process Claim
Dr. Rowen‘s petition alleged that the Commissioner failed to provide adequate notice and opportunity for a hearing before he certified Dr. Rowen‘s debt. But Dr. Rowen did not include that argument in his motion for summary judgment. And although the Commissioner affirmatively alleged in his motion for summary judgment that Dr. Rowen was not deprived of procеdural due process, Dr. Rowen did not respond to that argument. We conclude, therefore, that Dr. Rowen has abandoned any procedural due process claim and that the Commissioner is entitled to judgment as a matter of law on this issue. E.g., United States v. TDC Mgmt. Corp., 827 F.3d 1127, 1130 (D.C. Cir. 2016) (concluding an argument was
2. Dr. Rowen‘s Statute of Limitations Claim
Dr. Rowen also alleged in his petition that some portion of his liabilities may be unenforceable, but again he did not raise this argument in his motion for summary judgment. The Commissioner‘s cross-motion fоr summary judgment argues that, while Dr. Rowen has made a vague allegation that the period of limitations may apply, he has not identified any “specific component of his seriously delinquent tax debt” for which collection may be barred by the period of limitations. Dr. Rowen offered no response to this argument. As with respect to Dr. Rowen‘s procedural due process claim, we could rely on Dr. Rowen‘s
But there is more. The expiration of a period of limitations is an affirmative defense, and “the party raising it must specifically plead it and carry the burden of proving its applicability.” Amesbury Apartments, Ltd. v. Commissioner, 95 T.C. 227, 240 (1990). Dr. Rowen has made no effort on this front. Moreover, even if a portion of the tax debt at issue here were barred by the period of limitations on collection, unless that portion reduces Dr. Rowen‘s balance below $51,000, it would not affect the correctness of the Commissioner‘s certification. Again, neither Dr. Rowen‘s pleadings nor his summary judgment motion provides any clue as to the amount of his tax debt that is no longer collectible.
Finally, the administrative record confirms that there is no basis for Dr. Rowen‘s limitations period speculation. The administrative record includes certified Forms 4340, Certificate of Assessments, Payments, and Other Specified Matters,11 for Dr. Rowen‘s tax years 1994, 1996, 1997, and 2003 through 2007.
Based on the foregoing, we conclude that the Commissioner is entitled to a ruling in his favor with respect to Dr. Rowen‘s limitations claim.
B. No Error in Certification of Seriously Delinquent Tax Debt
With Dr. Rowen‘s constitutional objections and the preliminary matters out of the way, we turn next to the specific requirements of
When the Commissioner made the
Because the record supports the Commissioner‘s certification of Dr. Rowen as owing a seriously delinquent tax debt within the meaning of
V. Conclusion
In light of the discussion above, we will deny Dr. Rowen‘s motion for summary judgment and grant the Commissioner‘s cross-motion for summary judgment.
To reflect the foregoing,
An appropriate order and decision
will be entered.
Reviewed by the Court.
FOLEY, GALE, GUSTAFSON, PARIS, MORRISON, KERRIGAN, BUCH, NEGA, PUGH, ASHFORD, URDA, COPELAND, JONES, GREAVES, MARSHALL, and WEILER, JJ., agree with this opinion of the Court.
Congress enacted
Only one provision of
Dr. Rowen raised issues challenging the constitutionality of
The structure and wording of
Because the opinion of the Court has treated Dr. Rowen‘s constitutional challenge as one directed only to