Blake M. Adams

United States Tax Court
160 T.C. No. 1BLAKE M. ADAMS,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent
—————
Docket No. 1527-21P. Filed January 24, 2023.
—————
P had more than $1.2 million in unpaid, legally
enforceable federal income tax liabilities for eight taxable
years (relevant years). R attempted to collect those
liabilities, but had little success.
Ultimately, R certified to the Secretary of State that
P had a “seriously delinquent tax debt” within the meaning
of I.R.C. § 7345(b) for the relevant years. P filed a Petition
with this Court under I.R.C. § 7345(e)(1) to challenge the
certification.
R filed a Motion for Summary Judgment
maintaining that the certification was proper.
P filed a competing Motion for Summary Judgment
arguing that (1) the certification was erroneous because R
has not shown that the tax liabilities for the relevant years
have been properly assessed and (2) declining to renew P’s
passport because of unpaid taxes is an unconstitutional
denial of P’s right to international travel.
Held: To the extent P raises a substantive challenge
to the liabilities underlying the I.R.C. § 7345 certification
(that is, to the extent he claims he owes no tax for the
Served 01/24/23
2
relevant years), we lack jurisdiction to review the liabilities
underlying the I.R.C. § 7345 certification.
Held, further, to the extent P raises a definitional
challenge based on the text of I.R.C. § 7345(b)(1)(A), P’s
statutory argument fails because I.R.C. § 7345(b)(1)(A)
requires that the unpaid, legally enforceable tax liability
underlying a seriously delinquent tax debt “has been
assessed,” not that it “has been properly assessed,” and
there is no dispute here that the underlying liabilities for
the relevant years have been assessed.
Held, further, we lack jurisdiction to review the
constitutionality of passport-related actions taken by the
Secretary of State under the Fixing America’s Surface
Transportation Act, Pub. L. No. 114-94, § 32101, 129 Stat.
1312, 1729–33 (2015).
Held, further, P is not entitled to summary
judgment.
Held, further, R’s certification was not erroneous,
and R is entitled to summary judgment.
—————
Blake M. Adams, pro se.
Christina L. Holland and John S. Hitt, for respondent.
OPINION
TORO, Judge: In this passport case, petitioner, Blake M. Adams,
seeks review pursuant to section 7345(e) 1 of the Commissioner of
Internal Revenue’s certification to the Secretary of State that
Mr. Adams has a “seriously delinquent tax debt” related to tax years
2007, 2009, 2010, 2011, 2012, 2013, 2014, and 2015 (relevant years).
1 Unless otherwise indicated, all statutory references are to the Internal
Revenue Code, Title 26 U.S.C. (I.R.C. or Code), in effect at all relevant times, and all
Rule references are to the Tax Court Rules of Practice and Procedure.
3
Now before the Court are competing Motions for Summary
Judgment. As we explain below, we will grant the Commissioner’s
Motion and deny Mr. Adams’s.
Background
The following facts are derived from the parties’ pleadings and
Motion papers and the Declarations and Exhibits attached thereto as
well as from Responses to the Court’s Order served October 4, 2022.
They are stated solely for the purpose of ruling on the Motions before us
and not as findings of fact in this case. See Rowen v. Commissioner, 156
T.C. 101, 103 (2021).
Mr. Adams failed to file federal income tax returns for the
relevant years, and the Commissioner prepared a substitute for return
under section 6020(b) for each year. In due course, the Commissioner
assessed the tax shown in the substitutes for returns together with
penalties and interest. In total, the Commissioner assessed more than
$1.2 million in federal income tax, including interest and penalties, for
the relevant years. But Mr. Adams did not pay the assessed amounts.
Aiming to collect Mr. Adams’s substantial outstanding liabilities,
the Commissioner filed a notice of federal tax lien (NFTL) pursuant to
section 6323(f) for each of the relevant years. As required by
section 6320, the Commissioner notified Mr. Adams of the filing of the
NFTLs and of his rights under section 6320, including the right to
request a collection due process hearing. The dates of the NFTL filings
and notices of the NFTL filings are as follows:
Date of Notice of NFTL
Year Date of NFTL Filing
Filing
2007
2009
August 7, 2015 August 11, 2015
2010
2011
2012
August 5, 2016 August 11, 2016
2013
2014 August 16, 2019 August 20, 2019
2015 December 13, 2019 December 17, 2019
4
Mr. Adams did not request a collection due process hearing for
any of the relevant years. There is no dispute that the time for doing so
has lapsed. I.R.C. § 6320(a)(2), (3)(B). 2
The Commissioner’s collection efforts proved unsuccessful, and on
March 16, 2020, the Commissioner certified to the Secretary of State
that Mr. Adams had a “seriously delinquent tax debt,” which at the time
of certification totaled $1,206,083.95 for the relevant years. 3 Nearly
nine months later, on January 4, 2021, Mr. Adams petitioned this Court
to review the Commissioner’s certification pursuant to
section 7345(e)(1).
In time, the Commissioner moved for summary judgment,
arguing that Mr. Adams had a seriously delinquent tax debt as of the
time of the certification and that, therefore, the certification was correct
and should be sustained. Mr. Adams responded with his own Motion for
Summary Judgment. The Commissioner filed a Response to
Mr. Adams’s Motion. Although we directed Mr. Adams to file a
response, if any, to the Commissioner’s Motion, and extended the
deadline for doing so twice, Mr. Adams did not file a response.
Because the record did not establish whether the Secretary of
State had taken any adverse action with respect to Mr. Adams’s
passport, by Order served October 4, 2022, we directed the parties to file
a status report advising the Court on this point.
On October 17, 2022, the Commissioner filed a Status Report
advising that (1) the State Department issued a passport to Mr. Adams
on May 20, 2017, (2) the passport will expire on May 19, 2027, and
(3) “the State Department did not advise that any adverse action had
been taken” with respect to Mr. Adams’s passport. Resp’t’s Status
Report 1. The Status Report also noted that counsel for the
Commissioner spoke with Mr. Adams on October 17, 2022, and that
Mr. Adams “did not dispute any of the above information but said that
2 To facilitate the collection of the outstanding liabilities, the Commissioner
also relied on a levy for each of the relevant years. Because consideration of the NFTLs
suffices for resolving the case, we do not discuss the levies further. See also infra
note 5.
3 The Commissioner certified Mr. Adams as an individual with a seriously
delinquent tax debt for various of the relevant years on two other occasions, on July 30,
2018, and November 18, 2019. Mr. Adams did not challenge those certifications, and
we do not address them further.
5
he had lost his passport and intended to apply for a new passport.” Id.
at 2.
On November 14, 2022, after we extended the deadline for
complying with the Court’s October 4 Order, Mr. Adams filed a Status
Report advising that he had “scheduled an appointment with Miami
Passport Agency OMNI Center for October 21, 2022, at 7:30 a.m. to
apply for a passport.” Pet’r’s Status Report 1. Mr. Adams further
indicated that he had received a letter dated October 21, 2022, from “the
United States Department of State . . . denying issuance of a passport
due to the Department of Treasury’s IRS certification of seriously
delinquent tax de[b]t.” Id. at 2. Mr. Adams attached to the Status
Report a copy of the letter he received from the Department of State. Id.
Ex. 1. In relevant part, the letter reads:
Thank you for your recent passport application.
Unfortunately, you are ineligible to receive passport
services because the Department of Treasury’s Internal
Revenue Service (IRS) certified that you have a seriously
delinquent tax debt.
....
You must contact and make appropriate arrangements
with the IRS within ninety (90) days from the date of this
letter.
Once the Secretary of the Treasury has certified to the
Secretary of State that you have satisfied the seriously
delinquent tax debt, your name will be removed from the
certified list. If satisfactory payment arrangements have
not been made within 90 days of the date of this letter, your
application will be denied. The Department of State cannot
change, override, or appeal this policy.
Id.
6
Discussion
I. Background Law
A. Summary Judgment
The purpose of summary judgment is to expedite litigation and
avoid costly, time-consuming, and unnecessary trials. Fla. Peach Corp.
v. Commissioner, 90 T.C. 678, 681 (1988).
Generally, 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 such cases, the
moving party bears the burden of proving that summary judgment is
warranted. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Espinoza
v. Commissioner, 78 T.C. 412, 416 (1982). And, in deciding whether to
grant summary judgment in such cases, we construe factual materials
and inferences drawn from them in the light most favorable to the
adverse party. Sundstrand Corp., 98 T.C. at 520.
But, as we recognized in Van Bemmelen v. Commissioner, 155
T.C. 64, 78 (2020), in cases in which the Court “must confine [itself] to
the administrative record to decide whether there has been an abuse of
discretion,” the ordinary “summary judgment standard is not generally
apt.” In those cases, “summary judgment serves as a mechanism for
deciding, as a matter of law, whether the agency action is supported by
the administrative record and is not arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” Id. at 79.
Our Court has not yet decided the scope of review and the
standard of review for cases arising under section 7345. As we observed
in Rowen, 156 T.C. at 106, we need not consider them when “there is no
dispute between the parties with respect to the evidence we should
consider . . . [and when] our decision would be the same whether we
reviewed the Commissioner’s certification de novo or for abuse of
discretion.” The circumstances before us here are similar to those in
Rowen. As to the scope of review, there is no material dispute between
the parties regarding the evidence we should consider. As to the
standard of review, our decision would be the same whether we reviewed
the Commissioner’s certification de novo or for abuse of discretion.
Therefore, we once again have no occasion to decide the scope of review
7
and the standard of review for cases where the merits of the
Commissioner’s certification pursuant to section 7345 are at issue.
For convenience, however, and following the parties’ lead, we use
the terminology of the ordinary summary judgment standard in the
discussion that follows.
B. Certifications of Seriously Delinquent Tax Debts
Congress enacted section 7345 as part of the Fixing America’s
Surface Transportation Act (FAST Act), Pub. L. No. 114-94, § 32101(a),
129 Stat. 1312, 1729 (2015). We provided a comprehensive description
of FAST Act § 32101 and Code section 7345 in Rowen and need not
repeat that discussion here. We focus instead on the portions of
section 7345 relevant to the dispute before us.
If the Commissioner certifies that a taxpayer has “a seriously
delinquent tax debt,” section 7345(a) provides that that certification
shall be transmitted “to the Secretary of State for action with respect to
denial, revocation, or limitation of [the taxpayer’s] passport.” 4 The
Commissioner is responsible for notifying the taxpayer of the
certification. I.R.C. § 7345(d).
1. Definition of “Seriously Delinquent Tax Debt”
The term “seriously delinquent tax debt” is defined in
section 7345(b). It generally means
an unpaid, legally enforceable Federal tax liability of an
individual —
(A) which has been assessed,
(B) which is greater than $50,000, and
(C) with respect to which —
4 Section 7345 outlines a two-step procedure whereby the Commissioner sends
certification to the Secretary of the Treasury, who then transmits the certification to
the Secretary of State. In practice, the IRS follows a one-step procedure whereby the
Commissioner, as the Secretary’s delegate, transmits the certification directly to the
State Department. See I.R.C. § 7701(a)(11); Internal Revenue Manual 5.1.12.27.1, .6,
.8 (Dec. 20, 2017).
8
(i) a notice of lien has been filed pursuant to
section 6323 and the administrative rights under
section 6320 with respect to such filing have been
exhausted or have lapsed, or
(ii) a levy is made pursuant to section 6331.
I.R.C. § 7345(b)(1). The threshold amount described in subparagraph
(B) is modified by subsection (f) to account for inflation. The threshold
amount relevant here (i.e., the amount for the year when the section
7345 certification was made) was $53,000. See Rev. Proc. 2019-44,
§ 3.59, 2019-47 I.R.B. 1093, 1103.
The statute provides exceptions to this definition. For instance,
a seriously delinquent tax debt does not include “a debt with respect to
which collection is suspended . . . because a due process hearing under
section 6330 is requested or pending,” or because relief from joint and
several liability is sought pursuant to subsection (b), (c), or (f) of section
6015. I.R.C. § 7345(b)(2)(B). Additionally, no “debt that is being paid in
a timely manner pursuant to an [installment] agreement . . . under
section 6159 or [a compromise agreement under section] 7122” is a
seriously delinquent tax debt. I.R.C. § 7345(b)(2)(A).
If a certification is found to be erroneous or if the certified debt is
fully satisfied or ceases to be seriously delinquent because of one of the
exceptions, then the IRS must reverse its certification and notify the
Secretary of State and the taxpayer. I.R.C. § 7345(c)(1), (d). “In the case
of a certification found to be erroneous, such notification shall be made
as soon as practicable after such finding.” I.R.C. § 7345(c)(2)(D).
2. Our Role in Reviewing Section 7345 Certifications
Section 7345(e)(1) permits a taxpayer who has been certified as
having a seriously delinquent tax debt to petition this Court to
determine “whether the certification was erroneous or whether the [IRS]
has failed to reverse the certification.” Our jurisdiction in reviewing
certifications of seriously delinquent tax debts is set forth in section
7345(e)(1). If we find that a certification was erroneous, we “may order
the Secretary [of the Treasury] to notify the Secretary of State that such
certification was erroneous.” I.R.C. § 7345(e)(2). The statute specifies
no other form of relief that we may grant. Ruesch v. Commissioner, 25
F.4th 67, 70 (2d Cir. 2022), aff’g in part, vacating and remanding in part
154 T.C. 289 (2020).
9
II. Analysis
With this background in mind, we turn to the issues before us.
The Commissioner asks that we sustain his certification, while Mr.
Adams argues that (1) the certification was erroneous because the
Commissioner has not shown that the tax liabilities for the relevant
years were properly assessed and (2) declining to renew Mr. Adams’s
passport is an unconstitutional denial of his right to international
travel. As described further below, we find in favor of the Commissioner
on all points.
A. The Commissioner’s Certification Was Not Erroneous.
The Commissioner maintains that Mr. Adams’s outstanding
liabilities qualified as “seriously delinquent tax debt” as of the time of
the Commissioner’s certification. Specifically, he contends that by then,
the Commissioner had assessed more than $1.2 million in federal tax
liabilities, including penalties and interest, for the relevant years,
meeting the requirements of section 7345(b)(1)(A) and (B) and (f). 5
Those liabilities remained unpaid and were legally enforceable. In
addition, for each of the relevant years, the IRS had properly filed a
notice of federal tax lien pursuant to section 6323, and Mr. Adams had
allowed his collection due process rights under section 6320 to lapse,
meeting the requirements of section 7345(b)(1)(C)(i). We agree with the
Commissioner’s analysis. We therefore conclude that Mr. Adams’s
certification was not erroneous and should be sustained.
B. Mr. Adams’s Contrary Arguments Are Unavailing.
Mr. Adams makes two arguments as to why he believes the
certification was erroneous. First, he argues that the Commissioner’s
certification was erroneous because “[the Commissioner] has no
admissible evidence that [the] Notices of Deficiency were created and
mailed by certified mail to Petitioner’s last known address for any of the
years at issue” and that he “as a matter of law has failed to prove that
any of the taxes for years 2007 through 2015 were properly assessed on
Petitioner.” Pet’r’s Mot. for Summ. J. 1, 5. Second, Mr. Adams argues
that “[t]aking Petitioner’s passport over taxes is a clear denial of
5 Mr. Adams does not argue (and the record does not show) that any of the
exceptions to the definition of “seriously delinquent tax debt” in section 7345(b)(2)
apply here, so we need not consider those exceptions further.
10
petitioner’s right to international travel, which is unconstitutional.” Id.
at 5. Neither argument carries the day.
1. Mr. Adams’s First Argument
Mr. Adams’s first argument can be read in one of two ways. First,
one might interpret it as raising a substantive challenge to the liabilities
underlying the section 7345 certification. Second, one might interpret
it simply as alleging that the statutory definition is not satisfied because
the liabilities at issue here have not “been assessed.”
Because Mr. Adams is representing himself, we construe his
submissions liberally and will address each interpretation of his first
argument. See Rule 31(d) (“All pleadings shall be so construed as to do
substantial justice.”); see also Erickson v. Pardus, 551 U.S. 89, 94 (2007)
(per curiam) (explaining that documents filed by pro se litigants are “to
be liberally construed” (quoting Estelle v. Gamble, 429 U.S. 97, 106
(1976))); Gray v. Commissioner, 138 T.C. 295, 298 (2012) (“All claims in
a petition should be broadly construed so as to do substantial justice,
and a petition filed by a pro se litigant should be liberally construed.”),
supplemented by 140 T.C. 163 (2013). As we now explain, we find
neither interpretation persuasive.
a. Substantive Challenge to the Liabilities
Underlying the Section 7345 Certification
To the extent Mr. Adams intends to press a substantive challenge
to the liabilities underlying the section 7345 certification, we face a
threshold question: Does section 7345 authorize us to look behind the
outstanding liabilities as of the time of the certification and consider
issues that affect the determination of those liabilities?
The Commissioner points out that this Court previously
answered the question in the Commissioner’s favor in Ruesch, 154 T.C.
at 297, holding that we do not have jurisdiction to redetermine the tax
liabilities underlying the certification of a seriously delinquent tax debt.
On appeal, the U.S. Court of Appeals for the Second Circuit vacated for
mootness the portion of our order in Ruesch resolving the jurisdictional
question. See Ruesch v. Commissioner, 25 F.4th at 71–72. 6
6 The Second Circuit vacated the Ruesch order in part because, at the time we
issued the order (and the opinion setting out our reasoning in support of the order),
11
The view of the Supreme Court and virtually all the courts of
appeals is that when a judgment is vacated, the vacatur deprives the
underlying opinion of any precedential effect. See O’Connor v.
Donaldson, 422 U.S. 563, 577 n.12 (1975) (“Of necessity our decision
vacating the judgment of the Court of Appeals deprives that court’s
opinion of precedential effect . . . .” (citing United States v. Munsingwear,
Inc., 340 U.S. 36 (1950))); U.S. Bancorp Mortg. Co. v. Bonner Mall
P’ship, 513 U.S. 18, 25–29 (1994) (discussing the subject of vacatur); see
also, e.g., Pub. Serv. Co. of N.H. v. Consol. Utils. & Commc’ns, Inc., 846
F.2d 803, 811 (1st Cir. 1988) (Vacatur on appeal “deprives the district
court’s opinions of precedential effect.” (cleaned up)); Picard v.
JPMorgan Chase & Co. (In re Bernard L. Madoff Inv. Sec. LLC), 721
F.3d 54, 68 (2d Cir. 2013) (“[V]acatur dissipates precedential force.”);
1621 Route 22 W. Operating Co. v. NLRB, 825 F.3d 128, 141 n.6 (3d Cir.
2016) (A vacated opinion “carries no precedential force.”); Hirschfeld v.
ATF, 14 F.4th 322, 328 (4th Cir. 2021), cert. denied sub nom. Marshall
v. ATF, 142 S. Ct. 1447 (2022); id. (Wynn, J., concurring in the result of
the Orders of Dismissal and Vacatur) (“I write separately to emphasize
that while, thanks to today’s technology, all vacated opinions remain
available in the public sphere, they have no legal value. Once vacated,
a prior opinion loses precedential value within this circuit.” (cleaned
up)); Cent. Pines Land Co. v. United States, 274 F.3d 881, 893 n.57 (5th
Cir. 2001) (describing “the important difference between [the] treatment
of a panel opinion after vacatur by the Supreme Court and [the]
treatment when a judgment is reversed on other grounds”); Amelkin v.
McClure, 330 F.3d 822, 828 (6th Cir. 2003) (“The . . . reasoning in the
vacated decision . . . does not operate as the law of the case.”); McCaster
v. Darden Rests., Inc., 845 F.3d 794, 799 n.5 (7th Cir. 2017) (“A vacated
panel opinion has no precedential force.”); Salitros v. Chrysler Corp., 306
F.3d 562, 575 n.2 (8th Cir. 2002) (“A vacated decision is deprived of its
precedential effect.”); Durning v. Citibank, N.A., 950 F.2d 1419, 1424 n.2
(9th Cir. 1991) (“A decision may be reversed on other grounds, but a
decision that has been vacated has no precedential authority
whatsoever.”); United States v. Nacchio, 555 F.3d 1234, 1243 n.9 (10th
Cir. 2009) (The holding of a vacated opinion “has no decisional
significance” and is only “an historical artifact.”); McKiver v. Sec’y, Fla.
the taxpayer had already received (from the IRS) the only relief she could under
section 7345: the reversal of her section 7345 certification. The Second Circuit
concluded that the question of mootness is an antecedent question to the question of
jurisdiction. Ruesch v. Commissioner, 25 F.4th at 71–72. Here, by contrast,
Mr. Adams’s section 7345 certification is still in effect, and whether we have
jurisdiction to redetermine his underlying liabilities remains a live controversy.
12
Dep’t of Corr., 991 F.3d 1357, 1367 (11th Cir. 2021) (A “vacated opinion
is officially gone and has no legal effect whatever, and none of the
statements made therein has any remaining force.’” (cleaned up)), cert.
denied sub nom. McKiver v. Inch, 142 S. Ct. 441 (2021). 7
Although an opinion issued in connection with a vacated
judgment retains no precedential effect, if the judgment is vacated for
reasons unrelated to the opinion’s analysis of an issue, nothing
precludes a future court from considering that analysis as persuasive
authority. To illustrate, in Seminole Nursing Home, Inc. v.
Commissioner, 12 F.4th 1150 (10th Cir. 2021), aff’g T.C. Memo. 2017-
102, the U.S. Court of Appeals for the Tenth Circuit recently accepted
our Court’s reliance on a previous decision, Lindsay Manor Nursing
Home, Inc. v. Commissioner, 148 T.C. 235 (2017), vacated on other
grounds, 725 F. App’x 713 (10th Cir. 2018), that had been vacated by the
Tenth Circuit for mootness. Explaining its rationale, the Tenth Circuit
stated: “[W]e vacated [the Tax Court’s] ruling only because the case had
been moot at the time of the ruling . . . . It was hardly an abuse of
discretion for the Tax Court to continue to adopt that court’s prior
reasoning when no higher court had cast doubt on that reasoning.”
Seminole Nursing Home, Inc. v. Commissioner, 12 F.4th at 1160.
Like the Tenth Circuit in Seminole Nursing Home, the Second
Circuit in Ruesch cast no doubt on our Court’s substantive analysis of
the underlying issue (i.e., our lack of jurisdiction to review the tax
liabilities underlying a section 7345 certification). Instead, the Second
Circuit simply held that the question was moot in that particular case.
Accordingly, although our opinion in Ruesch was deprived of its
precedential effect, it has not lost its persuasive value. See Seminole
Nursing Home, Inc. v. Commissioner, 12 F.4th at 1160. And we see no
reason to depart from it here. We therefore readopt our holding in
Ruesch, concluding that we do not have jurisdiction to review the
7 The D.C. Circuit’s view appears to be more nuanced. See Simon v. Republic
of Hungary, 579 F. Supp. 3d 91, 137–38 (D.D.C. 2021) (summarizing D.C. Circuit
precedent); cf. Coal. to End Permanent Cong. v. Runyon, 979 F.2d 219, 221 n.2 (D.C.
Cir. 1992) (Silberman, J., dissenting from the per curiam disposition) (“Even a mooted
decision that is not vacated still retains precedential value, since the very reason we
vacate is to remove a decision’s precedential effect. See 13A C. Wright, A. Miller & E.
Cooper, Federal Practice and Procedure 2d § 3533.10, at 442–43 (1984). And even a
vacated opinion, while no longer the law of the case, still may carry ‘persuasive
authority,’ see Los Angeles v. Davis, 440 U.S. 625, 646 n.10 (1979) (Powell, J.,
dissenting), and even some precedential value, see Action Alliance of Senior Citizens v.
Sullivan, 930 F.2d 77, 83 (D.C. Cir. 1991).”).
13
liabilities underlying the certification of a seriously delinquent tax debt.
See Ruesch, 154 T.C. at 295–98 (reasoning that the text of section
7345(e)(1) contains no such jurisdictional grant).
As applied to this case, our conclusion means that we cannot
redetermine the tax liabilities underlying Mr. Adams’s section 7345
certification. We therefore decline to address the merits of his claim that
he owes no tax for the relevant years.
b. Definitional Challenge to the Section 7345
Certification
As already noted, one might also interpret Mr. Adams’s first
argument not as contesting the merits of the underlying liabilities, but
simply as alleging that the statutory definition is not satisfied because
the liabilities at issue here have not “been assessed.” This argument
merits closer consideration because whatever else the statute does or
does not permit us to do, it seems plain that it requires us to consider
whether the liabilities at issue were in fact assessed. An assessed
liability must exist before a seriously delinquent tax debt may be found.
See I.R.C. § 7345(b)(1)(A).
Section 6201(a)(1) directs the Secretary of the Treasury to “assess
all taxes determined by the taxpayer or by the Secretary as to which
returns or lists . . . are made.” An assessment is made when the IRS
makes an entry in its books that the taxpayer owes tax. I.R.C. § 6203;
Hibbs v. Winn, 542 U.S. 88, 100 (2004); Baltic v. Commissioner, 129 T.C.
178, 183 (2007).
There is no dispute here that the IRS assessed the amounts it
thought Mr. Adams owed for the relevant tax years. Mr. Adams does
not contend otherwise. Rather, Mr. Adams appears to argue that the
assessments were improper because they failed to comply with certain
procedural requirements, such as the rule in section 6213(a) that no
assessment of a deficiency may be made until, among other things, a
notice of deficiency has been mailed to the taxpayer. And, in his view,
without a proper assessment, there can be no seriously delinquent tax
debt.
The text of section 7345 refutes Mr. Adams’s argument.
Section 7345 requires simply that the liability “has been assessed,” not
that the liability “has been properly assessed.” The statute imposes no
additional conditions besides mere assessment and includes no cross-
references to the procedural requirements on which Mr. Adams relies.
14
Cf. Knight v. Commissioner, 552 U.S. 181, 188 (2008) (“The fact that
[Congress] did not adopt [a] readily available and apparent alternative
strongly supports rejecting [a] reading [that relies on the rejected
alternative text].”). In short, once the existence of an assessment is
shown (as has been done here), section 7345(b)(1)(A) is satisfied, and we
have no authority to inquire further.
Our reading of section 7345(b)(1)(A) is confirmed by the text of
section 7345(b)(1)(C). Each clause of section 7345(b)(1)(C) contemplates
that the filing of a notice of lien or the making of a levy must have been
“pursuant to” a relevant Code provision (section 6323, in the case of
liens, and section 6332, in the case of levies). By contrast,
section 7345(b)(1)(A) contains no such “pursuant to” language to qualify
the phrase “which has been assessed.” Courts assume that when
Congress includes specific words in one provision and excludes them
from a neighboring provision, it does so intentionally. See, e.g., Loughrin
v. United States, 573 U.S. 351, 358 (2014) (“We have often noted that
when ‘Congress includes particular language in one section of a statute
but omits it in another’—let alone in the very next provision—this Court
‘presume[s]’ that Congress intended a difference in meaning.” (quoting
Russello v. United States, 464 U.S. 16, 23 (1983))); Grajales v.
Commissioner, 47 F.4th 58, 62 (2d Cir. 2022) (same), aff’g 156 T.C. 55(2021). We therefore will not read the word “properly” into the text of
section 7345(b)(1)(A), as Mr. Adams wishes for us to do.
Our conclusion is also consistent with the Code’s overall structure
for assessments and collections. Before receiving the certification now
before us, Mr. Adams had multiple opportunities to challenge the
assessments of tax for the relevant years. For example, he could have
challenged in our Court any notices of deficiency the IRS sent before
making the assessments. 8 See I.R.C. § 6213(a). Even if Mr. Adams did
not receive notices of deficiency, he could have challenged the propriety
of the assessments in collection due process proceedings for the relevant
years. See I.R.C. §§ 6320(b)(1), (c), 6330(c)(1) and (2)(A). He was sent
notices of his right to such proceedings both when the NFTLs were filed
and when the IRS proposed to levy. And, if he had been dissatisfied with
the outcome of those proceedings, he again could have sought further
review in our Court. See I.R.C. §§ 6320(c), 6330(d)(1); see also, e.g.,
8 Mr. Adams does not appear to contend that he did not receive notices of
deficiency for the relevant years. Instead, he appears to argue that the Commissioner
failed to show that he sent them the proper way as provided under section 6212(a),
which authorizes the Secretary to send notices “by certified mail or registered mail.”
15
Callahan v. Commissioner, 130 T.C. 44, 50 (2008) (reviewing a
taxpayer’s underlying liability de novo in a CDP case when the taxpayer
had not received a notice of deficiency); Craig v. Commissioner, 119 T.C.
252, 261 (2002) (same). Given these prior opportunities for
administrative and judicial review, it is entirely reasonable for
section 7345(b)(1)(A) not to offer yet another avenue for challenging
whether an assessment has been properly made, but to require only that
the assessment has been made.
In view of the foregoing, we agree with the Commissioner that, as
of the time the certification was made, Mr. Adams had a seriously
delinquent tax debt and therefore the Commissioner’s certification was
not erroneous.
2. Mr. Adams’s Second Argument
As noted, Mr. Adams also argues that “[t]aking [his] passport
over taxes is a clear denial of [his] right to international travel, which is
unconstitutional.” Pet’r’s Mot. for Summ. J. 5. Mr. Adams recognizes
that in Rowen, 156 T.C. at 111, we rejected a claim that “[section] 7345
is unconstitutional . . . because it prohibits international travel.” As we
observed in Rowen:
[S]ection 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
Commissioner, may revoke or deny a passport, and the
Secretary of State’s authority does not derive from
section 7345.
16
Id. at 113. Mr. Adams urges us to reconsider that holding. We decline
to do so.
To the extent Mr. Adams intends to raise a broader claim than
that addressed in Rowen and to challenge on constitutional grounds the
authority the FAST Act gave the Secretary of State to deny or revoke
the passports of individuals with seriously delinquent tax debts, see
FAST Act § 32101(e), 129 Stat. at 1732, such a challenge must also fail,
because we do not have jurisdiction to review the constitutionality of the
Secretary of State’s passport-related actions under FAST Act
§ 32101(e). 9
Our sole jurisdictional grant under the FAST Act lies in
section 7345(e)(1). Under that section, after the Commissioner certifies
that a taxpayer has a seriously delinquent tax debt, “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.” In that action, “[i]f
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.” I.R.C. § 7345(e)(2).
The text of section 7345(e) focuses exclusively on the
Commissioner’s actions certifying seriously delinquent tax debts and
authorizes our Court (and the district courts) to determine whether
those actions are erroneous. Section 7345(e)(1) makes no mention of the
Secretary of State’s passport actions or FAST Act § 32101(e) and
provides no authority for us (or the district courts) to review those
actions or to issue any orders to the Secretary of State with respect to
passport actions. 10 This is a meaningful omission and unlikely to be
9 For cases involving challenges to adverse passport actions by the Secretary
of State, see, for example, Franklin v. United States, 49 F.4th 429 (5th Cir. 2022),
Maehr v. U.S. Dep’t of State, 5 F.4th 1100 (10th Cir. 2021), and Jones v. Mnuchin, 529
F. Supp. 3d 1370 (S.D. Ga. 2021). These cases illustrate the proper procedural route
for challenging the constitutionality of the Secretary of State’s actions under the FAST
Act, while also demonstrating that neither district courts nor the courts of appeals
have been receptive to constitutional arguments similar to those Mr. Adams offers
here.
10 The actions of the Secretary of State would be reviewable in district court
under the Administrative Procedure Act, 5 U.S.C. §§ 701–706, and 28 U.S.C. § 1331 in
an appropriate case. See, e.g., Maehr, 5 F.4th at 1106–07. See generally 14 Charles
17
attributable to congressional oversight, as the text of section 7345 and
the structure of FAST Act § 32101 confirm.
As to the text, section 7345(a) expressly discusses three
governmental actors—the Commissioner (who certifies a seriously
delinquent tax debt), the Secretary of the Treasury (who transmits that
certification to the Secretary of State), and the Secretary of State (who
receives the certification “for action with respect to denial, revocation,
or limitation of a passport pursuant to section 32101 of the FAST Act”).
By contrast, section 7345(e)(1)—the provision authorizing judicial
review—mentions only the Commissioner’s certification without
reference to the Secretary of State or to any passport action. Similarly,
the orders authorized under section 7345(e)(2) focus on the certification
action, not any passport action. And the action in our Court is instituted
“against the Commissioner,” not against the Secretary of State. I.R.C.
§ 7345(e)(1). In our view, such precise drafting was intentional.
Turning next to the structure of FAST Act § 32101, as we
observed in Rowen, 156 T.C. at 107–10, that provision contained seven
operative subsections, four that amended the Code and provided rules
for the Commissioner and the Secretary of the Treasury, and three that
provided rules for the Secretary of State. Of relevance here,
subsection (a) enacted section 7345 and the certification rules that
govern the conduct of the Commissioner, while subsection (e) enacted
the passport rules that govern the conduct of the Secretary of State in
connection with that certification. The judicial review provision that
authorizes our review here (section 7345(e)) was included in FAST Act
§ 32101(a) and, as just explained, makes no reference to FAST Act
§ 32101(e). In light of the structure of FAST Act § 32101, we have no
reason to think that the text of section 7345(e) should mean something
other than what it says. Indeed, given our Court’s historical
specialization in tax matters and disputes involving the Commissioner,
there is every reason to think it means exactly what it says.
In short, if Congress had intended to authorize us to review the
passport actions of the Secretary of State under section 7345(e), it
certainly knew how to say so. It did not take that step, and our Court
exercises jurisdiction only over matters that Congress expressly
authorizes us to consider. See I.R.C. § 7442; Estate of Young v.
Commissioner, 81 T.C. 879, 881 (1983). We therefore conclude that we
Alan Wright, Arthur R. Miller & Helen Hershkoff, Federal Practice and Procedure
§ 3659, Westlaw (database updated April 2022).
18
do not have jurisdiction to review the constitutionality of the Secretary
of State’s passport actions under section 32101 of the FAST Act.
III. Conclusion
In view of the foregoing, Mr. Adams’s Motion for Summary
Judgment must be denied, and the Commissioner is entitled to
judgment as a matter of law.
Accordingly,
An appropriate order and decision will be entered.